In this article, we discuss the 11 best nickel stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Nickel Stocks to Buy Now.
Nickel has become an important source of revenue for mining and processing companies as the demand for the metal increases. Nickel is a versatile metal that can be used for a variety of purposes. For example, nickel is used to make the cathodes in batteries developed by electric vehicle manufacturers. It can also be used for armor plating, the manufacture of boat propeller shafts, and turbine blades. Nickel can combine with other metals and has corrosion-resistant properties at high temperatures. This enables use in stainless steel products.
According to a report by research firm IMARC Group, the global nickel market size was estimated at around $35 billion in 2022. By the end of 2028, this is forecast to jump to more than $46 billion, exhibiting a compound annual growth rate of more than 5%. Some of the factors contributing to this growth, per the research firm, include rapid technological advancements, favorable government policies, burgeoning investments in infrastructure projects, and the rising demand for stainless steel products.
Jim Lennon, a commodity strategy consultant at financial services firm Macquarie Bank, recently told a metals conference that China and Indonesia remain the key players in the nickel industry, accounting for a whopping 70% of the global supply and demand for the metal. The latter accounts for more than 55% of the global supply of nickel, a figure expected to jump to more than 70% within the next five years. The growth rate of nickel, per Lennon, is the highest for any base metal this decade. That’s why we are interested in identifying the best nickel stocks to buy now.
Some of the companies that are expected to benefit from this growth include Vale S.A. (NYSE:VALE), ATI Inc. (NYSE:ATI), and Rio Tinto Group (NYSE:RIO). Vale S.A. (NYSE:VALE) is a Brazilian mining firm, ATI Inc. (NYSE:ATI) is a US-based specialty products firm, and Rio Tinto Group (NYSE:RIO) is a metals firm headquartered in the United Kingdom. The nickel mining and processing efforts of these firms will likely lead to greater supplies of nickel next year than the global demand, per the International Nickel Study Group.
In May this year, Rio Tinto Group (NYSE:RIO) had announced that it had signed a deal with Trek Metals that included an option to farm-in over the Jimblebar nickel-copper project in the Pilbara region of Western Australia. According to the latter, the Jimblebar project is highly prospective for magmatic nickel-copper sulfide mineralisation and contains the western arm of the Jimblebar greenstone belt. Per the deal, the former can choose to farm-in to the Jimblebar project to earn an 80% joint venture interest at any time during the option period.
Eduardo Bartolomeo, the CEO of Vale S.A. (NYSE:VALE), said during the third quarter earnings call that his company was confident that even though nickel outlook was softening, there was a bright future ahead for both nickel and copper. He noted that as the firm fixed operational issues, it would have even more value to attract on these assets. He also underlined that the company remained on track to deliver production guidance on nickel while reviewing the asset to unlock value potential.
“In nickel, we are performing as planned, which includes the continued transition of the Voisey’s Bay mine to underground and the rebuild of the Onca Puma furnace 1 later this year. Our outlook for 2022 nickel production remains unchanged. Next slide, please. We are accelerating breakthrough iron ore solutions to deliver the high-quality required by a decarbonizing world.
The first briquetting plant is under commissioning with the ramp-up expected by the end of this year. We expect to commission the second plant in early 2024 with the ramp-up at the beginning of the second quarter. The combined capacity will be 6 million tonnes per year. 2024 will be our first year with industrial-level production and will be a year of operational fine-tuning for the long-term reliability.
On the mega hubs development front, we signed two strategic agreements to assess opportunities with Porto do Acu for a facility in Brazil for hot briquette iron production using our pellets and with H2 Green Steel for concentration units in Brazil and the United States directed toward products for the low-carbon steel value chain, including HBI using our briquettes. Concentration solutions are critical to our decarbonization strategy, and we expect to build our first mega hub in 2024. Next slide, please. Fostering circular mining, we launched Agera, a company dedicated to developing our sustainable sand business.”
Our Methodology
The companies that operate in the nickel sector were selected for the list and ranked according to hedge fund sentiment. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2023 was used to identify the number of hedge funds that hold stakes in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Image by Tshekiso Tebalo from Pixabay
Best Nickel Stocks to Buy Now
11. TMC the metals company Inc. (NASDAQ:TMC)
Number of Hedge Fund Holders: 6
TMC the metals company Inc. (NASDAQ:TMC) is a deep-sea minerals exploration firm. It primarily focuses on the exploration and development of nickel, cobalt, copper, and manganese products. On November 10, investment advisory Cantor Fitzgerald initiated coverage of TMC the metals company Inc. (NASDAQ:TMC) stock with a Speculative Buy rating and a price target of $4.2.
At the end of the third quarter of 2023, 6 hedge funds in the database of Insider Monkey held stakes worth $842,000 in TMC the metals company Inc. (NASDAQ:TMC), compared to 5 in the preceding quarter worth $548,000.
Just like Vale S.A. (NYSE:VALE), ATI Inc. (NYSE:ATI), and Rio Tinto Group (NYSE:RIO), TMC the metals company Inc. (NASDAQ:TMC) is one of the best nickel stocks to buy now.
10. Haynes International, Inc. (NASDAQ:HAYN)
Number of Hedge Fund Holders: 12
Haynes International, Inc. (NASDAQ:HAYN) is a company that makes and sells nickel and cobalt-based alloys. On November 16, Haynes International, Inc. (NASDAQ:HAYN) posted earnings for the fourth quarter of 2023, reporting a revenue of more than $160 million, up more than 11% compared to the revenue over the same period last year.
At the end of the third quarter of 2023, 12 hedge funds in the database of Insider Monkey held stakes worth $34 million in Haynes International, Inc. (NASDAQ:HAYN), compared to 10 the preceding quarter worth $36 million.
In its Q3 2023 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Haynes International, Inc. (NASDAQ:HAYN) was one of them. Here is what the fund said:
“Haynes International, Inc. (NASDAQ:HAYN) develops and manufactures high-performance super-alloys. Nickel- and cobalt-based alloys play a critical role in high-heat applications, including jet engines, and highly corrosive environments, such as chemical processing. Haynes’ business is poised to capitalize on a beneficial global aerospace market which is generating strong growth.”
9. Schnitzer Steel Industries, Inc. (NASDAQ:SCHN)
Number of Hedge Fund Holders: 12
Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) is developing methods for the safe storage, collection, and sale of nickel for the EV industry through its recycling program. In late October, Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) announced earnings for the fourth fiscal quarter, reporting earnings per share of $0.47 and a revenue of over $717 million.
At the end of the third quarter of 2023, 12 hedge funds in the database of Insider Monkey held stakes worth $32 million in Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), compared to 14 in the preceding quarter worth $39 million.
8. Sibanye Stillwater Limited (NYSE:SBSW)
Number of Hedge Fund Holders: 16
SBSW ranks 8th on our list of the best nickel stocks to buy now. Sibanye Stillwater Limited (NYSE: SBSW) is a South African mining company that produces gold, nickel, copper, chrome, and other metals. On November 9, Sibanye Stillwater Limited (NYSE:SBSW) announced that it had agreed to acquire US metals recycler Reldan for $211 million. Reldan is a Pennsylvania-based recycling company that re-processes various waste streams, including industrial waste.
Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in Sibanye Stillwater Limited (NYSE:SBSW) with 5 million shares worth more than $31 million.
7. Materion Corporation (NYSE:MTRN)
Number of Hedge Fund Holders: 16
Materion Corporation (NYSE:MTRN) makes and sells advanced engineering materials. On November 2, investment advisory KeyBanc maintained an Overweight rating on Materion Corporation (NYSE:MTRN) stock and raised the price target to $130 from $128.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm GAMCO Investors is a leading shareholder in Materion Corporation (NYSE:MTRN) with 241,350 shares worth more than $24 million.
6. Ryerson Holding Corporation (NYSE:RYI)
Number of Hedge Fund Holders: 17
Ryerson Holding Corporation (NYSE:RYI) processes and distributes industrial metals. In early December, Ryerson Holding Corporation (NYSE:RYI) announced that it had purchased California-based Hudson Tool Steel. Hudson Tool Steel is a supplier of tool steels and high-speed, carbon, and alloy steels.
At the end of the third quarter of 2023, 17 hedge funds in the database of Insider Monkey held stakes worth $58 million in Ryerson Holding Corporation (NYSE:RYI), compared to 19 in the previous quarter worth $68 million.
In addition to Vale S.A. (NYSE:VALE), ATI Inc. (NYSE:ATI), and Rio Tinto Group (NYSE:RIO), Ryerson Holding Corporation (NYSE:RYI) is one of the best nickel stocks to buy now.
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Disclose. None. 11 Best Nickel Stocks to Buy Now is originally published on Insider Monkey.