ASX materials shares have been some of the worst performing stocks over the last 12 months.
But while bank and tech stocks flirt with record high's, there may be opportunity in a battered materials sector.
Lets look at two that have fallen significantly over the last 12 months.
Mineral Resources Ltd (ASX: MIN)
Mineral Resources shares jumped more than 3% higher yesterday. This claws back only a small fraction of the drop of more than 40% over the past year.
It is a mining services company with a portfolio of mining operations across multiple commodities, including iron ore and lithium.
It has consistently appeared in the list of most shorted shares this month.
Struggling commodity prices and governance concerns negatively impacted its performance over the last year.
Based on price targets from brokers, there is little optimism of a rebound in the short term.
At the time of writing, shares in the ASX materials company are trading at $30.93.
Macquarie maintains a price target of $22.00, suggesting it could continue to fall further.
Meanwhile, Bell Potter has a price target of $29.50, suggesting it is close to fair value.
James Hardie Industries PLC (ASX: JHX)
James Hardie Industries is the world's leading producer and marketer of fibre cement building products. It is also a major supplier of fibre gypsum and cement-bonded boards in Europe.
Its share price has fallen 25.83% in the past year, however it did recover during June.
The James Hardie share price raced 18% higher during the month. It seems investors were buying ahead of the closing of its proposed acquisition of AZEK Company.
It has gained the attention of brokers who are now tipping the ASX materials share to continue its bounceback.
Bell Potter has a $63.00 price target on the shares, which is 58.49% higher than its current share price of $39.75.
Speaking in May, the broker said:
The company is prepared to navigate challenging markets while leveraging strategic growth opportunities through the AZEK merger. Management remains focused on maintaining margin stability and capitalising on material conversion potential.
The post Are these two struggling ASX materials shares undervalued? appeared first on The Motley Fool Australia.
Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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