Morningstar Advisor - August/September 2010 - 63

Sector Snapshot: Basic Materials
The data shown on this page represents basic-materials companies covered by Morningstar analysts, including companies in the steel, aluminum, cement, coal, gold, silver, copper, and industrial metals and mining industries.

Sector Structure
Moat Breakdown* % Breakdown S&P 500

Key Stats
Aggregates

Industry Map
60
4 3 Market Cap Large

Number of Companies Total Market Cap Total Fair Value Total Revenue
Valuation
6479.800293 5234.600220 3989.400146 2744.200073 1499.000000

31878.001953 25840.001465 19802.000977 13764.000488 7726.000000

2 1 5

Wide Moat Narrow Moat No Moat
Stock Type Breakdown

0.00% 69.60% 30.40%

42.30% 44.90% 11.70%

$952.8 billion
31878.001953 25840.001465 19802.000977 13764.000488 7726.000000

$851.1 billion
31878.001953 25840.001465 19802.000977 13764.000488 7726.000000

$457.7 billion

6 7 10 9 13 1112 8 15 14

Medium

% Breakdown

S&P 500

High Yield Distressed Hard Asset Cyclical Slow Growth Classic Growth Aggressive Growth Speculative Growth Not Classified
*Based on Morningstar analyst coverage.

0.00% 1.30% 6.10% 9.90% 0.00% 0.00% 0.00% 0.00% 82.60%

1.90% 2.10% 12.10% 33.30% 16.50% 15.50% 15.60% 2.40% 0.40%

Sector

S&P 500
1282.600037 1067.200027 851.800018 636.400009 421.000000

Price/Fair Value P/E Price/Book Price/Sales Price/Cash Flow Dividend Yield %

1067.200027

1.12 19.80 2.60 4.30 199.95 1.53

0.84 12.81
420 336 252 168 84

Small

636.400009

1.84 1.15
0

Undervalued 0 .5 Price/Fair Value 1

Overvalued 1.5 2

4.89 2.62

Profitability and Financial Health Sector S&P 500

0.0

0.0 0.0

ROE % ROA % Net Margin % Debt to Capital %

12.52 5.79 11.96 26.04

20.27 7.98 11.97 36.57

Basic materials-sector companies are plotted based on their market cap and price/fair value ratio. Companies with a price/fair value ratio of less than 1 are undervalued. Companies with a ratio of more than 1 are overvalued. Numbered plots show companies listed in the “Basic Materials-Sector Companies” chart below.
0.5 1.0 1.5 2.0 0.5 1.0 1.5 2.0 0.5 1.0 1.5 2.0 0.0 0.5 1.0 1.5 2.0 0.0 0.5 1.0 1.5 2.0

H

R U

S
Growth Grade Profitability Grade Financial Price/Fair Health Value Grade Dividend Yield % Free Cash Flow Yield %

Basic Materials-Sector Companies
Name/Ticker Market 3-Yr Total Cap ($mil) Rtrn % Revenue TTM ($mil) 3-Yr Rev/ Morningstar Share Rating Growth % Uncertainty Rating Economic Moat

1 2 3 4 5 6 7 8

BHP Billiton Limited ADR BHP Vale S.A. ADR VALE Rio Tinto PLC ADR RTP ArcelorMittal MT Barrick Gold Corporation ABX Posco ADR PKX Goldcorp, Inc. GG Newmont Mining Corporation NEM

187,862.45 132,663.83 60,061.24 47,295.71 42,462.30 32,045.68 30,713.72 29,819.67 27,741.38 26,395.34 25,678.50 23,712.64 22,884.71 19,710.21 15,142.90

1.75 45,007.00 1.14 24,591.00 –9.45 41,825.00 –20.99 68,640.00 11.31 16.70 15.02 8,922.00 2,849.10 8,411.00 –11.44 32,060.13

NA QQQ 5.86 QQQ 3.42 QQQQ 13.01 QQQ 12.56 QQQ 16.78 QQQ

Medium High High High High High High High

Narrow X Narrow X Narrow X Narrow C None
0.0

C V V V V V V X C V C X V V B
0.5 0.5

NA NA NA
C

0.93 0.82 0.64 0.57 0.86
1.0

2.50 1.77 1.89 2.10 0.93
1.5 2.0

4.33 –0.72

NA QQQQQ Medium

6.37
9.49 –11.01 –0.28 3.95 10.13
2.0

X

NA NA
X X

Narrow C None None
0.0

0.87 1.16 1.23 0.78

NA 6,947.43 0.43 0.65 1.87

C X

16.43 QQQ
37.46 QQQ 0.04 QQQQ –11.90 QQQ 9.24 QQQ 1.79 QQQ 1.62 QQQ 13.35 QQQ

9 Freeport-McMoRan Copper & Gold B FCX 10 CEMEX SAB de CV ADR CX 11 12 13

–11.02 16,801.00 –32.18 15,965.04 –2.04 21.76 –7.48 –0.96 4,331.69 5,754.65 7,353.75 3,954.00

Very High Narrow X Narrow V Very High Narrow C Very High Narrow X Very High None High None
C

NA NA
X
1.0

0.66 1.04 1.06 0.92 0.97 0.80

1.5

NA 5.96 7.42 2.17 1.57 0.46

106.44 2.14 –3.75 11.37 25.23 –3.80

Southern Copper Corporation SCCO Companhia Siderurgica Nacional ADR SID Tenaris SA ADR TS

NA
X C

14 Gerdau SA ADR GGB 15 AngloGold Ashanti Limited ADR AU Data as of July 13, 2010

2.10 15,305.10

Very High Narrow X C

NA

MorningstarAdvisor.com 63


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Morningstar Advisor - August/September 2010

Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2010

Morningstar Advisor - August/September 2010
Contents
New on MorningstarAdvisor.com
Contributors
Letter From the Editor
What Aspects of Health-Care Reform Will Most Affect Your Clients?
Bonds, Chicago Style
Investment Briefs
Which Risk Are You Managing?
Eye on the Prize
Advisors Can’t Rely on Fidelity Alone
Health Care Gets Back to Business
An Opportune Time to Bet the Pharm
Reform’s Impact on Other Health-Care Industries
Top Takeover Targets in Biotech
After Reform, Narrow-Moat Firms Have Strong Prospects in Diagnostics
Health-Care Investing Alive and Well
Quest for Knowledge
Four Picks for the Present
How to Make Your Bond Portfolio Inflation-Resistant
Weeding Through the Energy Patch
Uncertainty and Value in Basic Materials
Stock Market Doom-Busters
Hunting Down European Debt-Dodgers
Mutual Fund Analyst Picks
50 Most Popular Equity ETFs
Undervalued Stocks With Wide Moats
VA Sales Slip a Bit in First Quarter
New at Morningstar
Star Wars, the Sequel
Morningstar Advisor - August/September 2010 - Morningstar Advisor - August/September 2010
Morningstar Advisor - August/September 2010 - Cover2
Morningstar Advisor - August/September 2010 - 1
Morningstar Advisor - August/September 2010 - 2
Morningstar Advisor - August/September 2010 - Contents
Morningstar Advisor - August/September 2010 - 4
Morningstar Advisor - August/September 2010 - 5
Morningstar Advisor - August/September 2010 - New on MorningstarAdvisor.com
Morningstar Advisor - August/September 2010 - 7
Morningstar Advisor - August/September 2010 - Contributors
Morningstar Advisor - August/September 2010 - Letter From the Editor
Morningstar Advisor - August/September 2010 - What Aspects of Health-Care Reform Will Most Affect Your Clients?
Morningstar Advisor - August/September 2010 - 11
Morningstar Advisor - August/September 2010 - Bonds, Chicago Style
Morningstar Advisor - August/September 2010 - 13
Morningstar Advisor - August/September 2010 - Investment Briefs
Morningstar Advisor - August/September 2010 - 15
Morningstar Advisor - August/September 2010 - Which Risk Are You Managing?
Morningstar Advisor - August/September 2010 - 17
Morningstar Advisor - August/September 2010 - 18
Morningstar Advisor - August/September 2010 - Eye on the Prize
Morningstar Advisor - August/September 2010 - 20
Morningstar Advisor - August/September 2010 - 21
Morningstar Advisor - August/September 2010 - Advisors Can’t Rely on Fidelity Alone
Morningstar Advisor - August/September 2010 - 23
Morningstar Advisor - August/September 2010 - 24
Morningstar Advisor - August/September 2010 - 25
Morningstar Advisor - August/September 2010 - 26
Morningstar Advisor - August/September 2010 - Health Care Gets Back to Business
Morningstar Advisor - August/September 2010 - An Opportune Time to Bet the Pharm
Morningstar Advisor - August/September 2010 - 29
Morningstar Advisor - August/September 2010 - Reform’s Impact on Other Health-Care Industries
Morningstar Advisor - August/September 2010 - 31
Morningstar Advisor - August/September 2010 - 32
Morningstar Advisor - August/September 2010 - Top Takeover Targets in Biotech
Morningstar Advisor - August/September 2010 - 34
Morningstar Advisor - August/September 2010 - 35
Morningstar Advisor - August/September 2010 - After Reform, Narrow-Moat Firms Have Strong Prospects in Diagnostics
Morningstar Advisor - August/September 2010 - 37
Morningstar Advisor - August/September 2010 - 38
Morningstar Advisor - August/September 2010 - 39
Morningstar Advisor - August/September 2010 - 40
Morningstar Advisor - August/September 2010 - Health-Care Investing Alive and Well
Morningstar Advisor - August/September 2010 - 42
Morningstar Advisor - August/September 2010 - 43
Morningstar Advisor - August/September 2010 - 44
Morningstar Advisor - August/September 2010 - 45
Morningstar Advisor - August/September 2010 - 46
Morningstar Advisor - August/September 2010 - 47
Morningstar Advisor - August/September 2010 - 48
Morningstar Advisor - August/September 2010 - Quest for Knowledge
Morningstar Advisor - August/September 2010 - 50
Morningstar Advisor - August/September 2010 - 51
Morningstar Advisor - August/September 2010 - Four Picks for the Present
Morningstar Advisor - August/September 2010 - 53
Morningstar Advisor - August/September 2010 - How to Make Your Bond Portfolio Inflation-Resistant
Morningstar Advisor - August/September 2010 - 55
Morningstar Advisor - August/September 2010 - 56
Morningstar Advisor - August/September 2010 - 57
Morningstar Advisor - August/September 2010 - Weeding Through the Energy Patch
Morningstar Advisor - August/September 2010 - 59
Morningstar Advisor - August/September 2010 - 60
Morningstar Advisor - August/September 2010 - Uncertainty and Value in Basic Materials
Morningstar Advisor - August/September 2010 - 62
Morningstar Advisor - August/September 2010 - 63
Morningstar Advisor - August/September 2010 - Stock Market Doom-Busters
Morningstar Advisor - August/September 2010 - 65
Morningstar Advisor - August/September 2010 - Hunting Down European Debt-Dodgers
Morningstar Advisor - August/September 2010 - 67
Morningstar Advisor - August/September 2010 - Mutual Fund Analyst Picks
Morningstar Advisor - August/September 2010 - 69
Morningstar Advisor - August/September 2010 - 70
Morningstar Advisor - August/September 2010 - 71
Morningstar Advisor - August/September 2010 - 50 Most Popular Equity ETFs
Morningstar Advisor - August/September 2010 - 73
Morningstar Advisor - August/September 2010 - Undervalued Stocks With Wide Moats
Morningstar Advisor - August/September 2010 - 75
Morningstar Advisor - August/September 2010 - VA Sales Slip a Bit in First Quarter
Morningstar Advisor - August/September 2010 - 77
Morningstar Advisor - August/September 2010 - 78
Morningstar Advisor - August/September 2010 - New at Morningstar
Morningstar Advisor - August/September 2010 - Star Wars, the Sequel
Morningstar Advisor - August/September 2010 - Cover3
Morningstar Advisor - August/September 2010 - Cover4
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