Basic Industry Sector SharpPlot version is 2.43 Paint the paper ===== Border ===== Region ===== X-Axis Ticks ===== X-Axis tickmarks Y-Axis Ticks ===== Y-Axis tickmarks Axes ===== Y-axis labels 1.6 1.7 1.8 1.9 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 for X-axis labels 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Heading, subheading and footnotes ===== Heading Basic Industry Sector Subheading Gross Profit Margin vs Relative Stock Price Index Footnotes Comment Start of Line Chart =========== Points follow ... Line Y-Axis Ticks ===== Y-Axis tickmarks Axes ===== Y-axis labels 27.5 28 28.5 29 29.5 30 30.5 31 31.5 32 32.5 33 33.5 34 34.5 Start of Line Chart =========== Points follow ... Line bump key Key ===== Key - Line Key - Line Sector Relative Price Index Gross Profit Margin Basic Industry Sector

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Tuesday, January 16, 2018: The share price index of the Basic Industry Sector has advanced by 31% relative to the Otos Total Market Index since the January, 2016 low. Current relative price to sales is about mid-range in the record of the Sector.

Last week the share price index of the Basic Industry Sector advanced by 2.2% compared to a 1.5% advance for the Otos Total Market Index. Gaining stocks in the Basic Industry Sector numbered 173 or 76.5% of the Sector total compared to a 30.1% gaining stocks frequency across the 3979 stocks in the Otos U.S. stocks universe.

We have collected third quarter sales data for 225 of the 226 comparable record companies in the Basic Industry Sector representing100% of the capital value. The Sector capital weighted average sales growth rate is 8.7%. The proportion of Sector market capital accounted for by rising sales growth companies is down to 79.2%, compared to 81.4% last quarter.

Currently, sales growth is high in the record of the Basic Industry Sector and higher than last quarter.

The proportion of total market capital accounted for by rising gross profit margin companies is up to 54.1% compared to 46.6% last quarter.

The Sector is recording a high and falling gross margin. Inventories are up, diminishing the chance of a further increase in the gross margin. SG&A expenses are high in the record of the Sector and falling. That implies that the Sector has further capability to accelerate EBITDA relative to sales with lower costs. SG&A expenses are falling at a more rapid rate than the gross margin, producing a rising EBITDA margin. This is a poor quality growth trend to the extent that lower costs can insulate the bottom line from top line weakness for only a short time. The shares have been correlated with the direction of the EBITDA profit margin. Interest costs are high in the record of the Sector and rising. Higher interest costs not only slow cash flow growth, but are often associated with lower valuation.

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Industries showing growing strength in fundamentals compared to this time last quarter are Gold & Silver and Railroads. The industries in this sector showing growing deterioration in fundamentals compared to this time last quarter are Packaging, Metals, Engineering & Construction, Machinery and Conglomerates.