In this article, we discuss 10 best small-cap nickel stocks to buy now.
Nickel has steadily climbed the mining ladder in the past few years, coming to dominate discussions around the growth of electric vehicles and the rise in production of stainless steel products. Nickel is an important raw material used in both products. In EVs, nickel is used to manufacture cathodes in lithium-ion batteries. Nickel sourced from sulfide and limonite deposits is ideal for this purpose. Nickel also readily combines with other metals and has corrosion-resistant properties at high temperatures, hence it is used in stainless steel products.
There has been a shortage in supply of the metal in the past few months due to a rise in post-pandemic demand coupled with supply chain problems. Despite these headwinds, the International Nickel Study Group estimates that nickel usage increased by more than 16% last year and caused a supply shortfall of 168,000 tons. Per the group, the usage for nickel in 2022 will increase by close to 9%, climbing over 3 million tons. Supply shortages will decrease as production from a new Indonesian plant is expected to result in surplus tons of nickel.
Some of the prominent stocks that will benefit from this rising production of nickel include Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX). Even as production booms, there are concerns that a demand slowdown from China, the largest stainless steel producing nation in the world, might affect nickel usage overall. However, the fast growth of the EV sector will likely overshadow China worries, per investment bank Goldman Sachs.
The bank estimates that nickel usage in the EV battery sector will increase by 62% to 285,000 tons in 2022 and by another 26% to 358,000 tons in 2023. Indonesian markets will be the biggest beneficiary of this mini-boom for the nickel sector in the coming months. The country provides a bulk of the metal to industries in China, both for EV battery production and stainless steel. In 2021, the country mined 40% of the global production of the metal.
Investors looking for more exposure to the nickel space, which is also a great way to ride the boom in EVs and steel, but are not willing to invest in expensive mining stocks, there are several little-known nickel stocks that offer tremendous growth potential in the sector. Many firms in the space, especially in the small-cap range, have the potential to explode in the coming years as the demand for the metal rises significantly.
Our Methodology
The companies that operate in the nickel sector and had a market capitalization between $250 million to $2 billion, as of August 19, were selected for the list. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to quantify the popularity of each stock in the hedge fund universe.
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Best Small-Cap Nickel Stocks to Buy Now
10. Canada Nickel Company Inc. (OTC:CNIKF)
Number of Hedge Fund Holders: N/A
Market Capitalization as of August 19: $146 million
Canada Nickel Company Inc. (OTC:CNIKF) engages in the exploration and development of nickel sulfide assets. One of the premier projects of the firm is the Crawford Nickel-Cobalt Sulphide project that is located in northern Ontario. The firm provides nickel to a variety of industries through this project, including the electric vehicle, green energy, and stainless-steel markets. The company was founded in 2019 and is based in Toronto. The stock has climbed over 6% in the past few weeks.
Canada Nickel Company Inc. (OTC:CNIKF) is poised to benefit from the soaring demand for nickel in the next few months as there is an extreme shortage in supply due to the rise in EV battery and energy storage production. Canada Nickel Company Inc. (OTC:CNIKF) is also going to benefit from the recently passed clean energy bill in the US that places an emphasis on sourcing raw material for EVs from North American firms instead of the Chinese.
Just like Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Canada Nickel Company Inc. (OTC:CNIKF) is one of the stocks in the spotlight in the EV sector.
9. PolyMet Mining Corp. (NYSE:PLM)
Number of Hedge Fund Holders: 4
Market Capitalization as of August 19: $300 million
PolyMet Mining Corp. (NYSE:PLM) operates as a natural resource firm. On July 20, the company announced that it was partnering with Tech Resources in a move that would place the Mesaba mineral deposit and the NorthMet copper-nickel project, both located in Minnesota, under single management. Previously, the former had been owned by Teck while the latter was under PolyMet. The project owned by PolyMet is one of the largest undeveloped copper-nickel deposits in the world.
On August 11, PolyMet Mining Corp. (NYSE:PLM) posted earnings for the second quarter of 2022, reporting losses per share of $0.10 and a revenue of C$7.6 million. The stock is up close to 10% year-to-date amid rising metals prices.
At the end of the first quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $1 million in PolyMet Mining Corp. (NYSE:PLM), compared to 5 in the preceding quarter worth $754,000. Among the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Elkhorn Partners is a leading shareholder in PolyMet Mining Corp. (NYSE:PLM), with 117,000 shares worth more than $490,000.
8. Mechel PAO (NYSE:MTL)
Number of Hedge Fund Holders: 4
Market Capitalization as of August 19: $455 million
Mechel PAO (NYSE:MTL) has interests in the mining, steel, and power businesses. The company has extensive experience in selling value-added downstream metal products. These sometimes include nickel-based products. In addition to metal, the firm also generates and sells electricity and heat power to the third parties. Since the firm is based in Russia, it benefits from a steady supply of reasonably-priced raw products for the energy business, including nickel.
Mechel PAO (NYSE:MTL) was founded in 2003 and employs more than 53,000 people. It posted more than $5.3 billion in revenue in 2021, up from $3.5 billion in 2020. The firm is building a sustainability profile as well.
At the end of the first quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $2.4 million in Mechel PAO (NYSE:MTL), compared to 6 in the preceding quarter worth $7.9 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Mechel PAO (NYSE:MTL), with 1.5 million shares worth more than $1.7 million.
7. Haynes International, Inc. (NASDAQ:HAYN)
Number of Hedge Fund Holders: 7
Market Capitalization as of August 19: $536 million
Haynes International, Inc. (NASDAQ:HAYN) develops and sells nickel and cobalt-based alloys. In late July, the firm posted earnings for the third fiscal quarter, reporting earnings per share of $1.24, beating market estimates by $0.49. The revenue over the period was more than $130 million, up over 47% compared to the revenue over the same period last year and beating analyst expectations by $5 million. The firm revealed a revolver balance of $46.5 million, driven by the strong backlog growth.
On July 8, KeyBanc analyst Philip Gibbs maintained an Overweight rating on Haynes International, Inc. (NASDAQ:HAYN) stock and lowered the price target to $52 from $55, noting that materials stock had been oversold on broader macro worries.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Royce & Associates is a leading shareholder in Haynes International, Inc. (NASDAQ:HAYN), with 900,614 shares worth more than $38 million.
At the end of the first quarter of 2022, 7 hedge funds in the database of Insider Monkey held stakes worth $64 million in Haynes International, Inc. (NASDAQ:HAYN), compared to 9 in the preceding quarter worth $65 million.
6. Platinum Group Metals Ltd. (NYSE:PLG)
Number of Hedge Fund Holders: 8
Market Capitalization as of August 19: $142 million
Platinum Group Metals Ltd. (NYSE:PLG) is a precious metals and mining firm. The firm primarily explores for palladium, platinum, gold, copper, nickel, and rhodium deposits. The company also has extensive interests in developing new generation battery technology that can be used in electric vehicles and clean energy products. These batteries use nickel and other metals. In mid-July, the company posted a more than 16% year-on-year increase in revenue and adjusted EBITDA for the third fiscal quarter.
On July 13, Platinum Group Metals Ltd. (NYSE:PLG) posted earnings for the third fiscal quarter, reporting a revenue of more than C$754 million, up over 16% compared to the revenue in the same period last year.
Among the hedge funds being tracked by Insider Monkey, Cayman Islands-based investment firm CQS Cayman LP is a leading shareholder in Platinum Group Metals Ltd. (NYSE:PLG), with 883,365 shares worth more than $1.8 million.
At the end of the first quarter of 2022, 8 hedge funds in the database of Insider Monkey held stakes worth $3.3 million in Platinum Group Metals Ltd. (NYSE:PLG), compared to 5 in the preceding quarter worth $3 million.
Alongside Tesla, Inc. (NASDAQ:TSLA), Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), and Freeport-McMoRan Inc. (NYSE:FCX), Platinum Group Metals Ltd. (NYSE:PLG) is one of the stocks that will potentially ride the nickel boom.
5. Schnitzer Steel Industries, Inc. (NASDAQ:SCHN)
Number of Hedge Fund Holders: 10
Market Capitalization as of August 19: $983 million
Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) recycles ferrous and nonferrous metal. It also makes and sells steel products. The firm markets mixed metal joint products recovered from the shredding process. These include a variety of metals, including zorba, zurik, aluminum, copper, stainless steel, nickel, brass, titanium, lead, and high temperature alloys. In late June, the firm beat market estimates on earnings per share and revenue for the second quarter of 2022 by $0.29 and $106 million, respectively.
In late May, Goldman Sachs analyst Emily Chieng maintained a Buy rating on Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) stock and lowered the price target to $47 from $63, noting that near-term headwinds would affect the stock in the coming months.
At the end of the first quarter of 2022, 10 hedge funds in the database of Insider Monkey held stakes worth $50 million in Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), compared to 13 in the previous quarter worth $33 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Schnitzer Steel Industries, Inc. (NASDAQ:SCHN), with 314,542 shares worth more than $16 million.
4. TMC the metals company Inc. (NASDAQ:TMC)
Number of Hedge Fund Holders: 12
Market Capitalization as of August 19: $266 million
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. These products, especially those that are nickel-based, are used in a variety of industries, including electric vehicles, renewable energy storage markets, EV wiring, and clean energy transmission. The company is based in Canada and was founded in 2019. It was formerly known as Sustainable Opportunities Acquisition Corporation.
On August 15, TMC the metals company Inc. (NASDAQ:TMC) posted earnings for the second quarter of 2022, reporting losses per share of $0.05. The total cash on hand at the end of June was more than $46 million.
At the end of the first quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $10 million in TMC the metals company Inc. (NASDAQ:TMC), compared to 15 in the preceding quarter worth $3.5 million. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in TMC the metals company Inc. (NASDAQ:TMC), with 1.7 million shares worth more than $4.6 million.
3. Trinseo PLC (NYSE:TSE)
Number of Hedge Fund Holders: 15
Market Capitalization as of August 19: $1.1 billion
Trinseo PLC (NYSE:TSE) makes and sells plastic and latex products. Nickel is sometimes used in a combination of other materials for nickel butadiene rubber, a product offered by Trinseo. In late June, the company announced that it would be partnering with GMP, a circular business innovation firm in the Netherlands, to develop new recycling techniques for polystyrene. The company recently posted a 12% year-on-year increase in revenue for the second quarter of 2022.
On August 11, Deutsche Bank analyst David Begleiter downgraded Trinseo PLC (NYSE:TSE) stock to Hold from Buy and lowered the price target to $34 from $42, noting that the firm had begun to see slowing demand for products.
At the end of the first quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $28 million in Trinseo PLC (NYSE:TSE), compared to 10 in the preceding quarter worth $6 million.
2. Materion Corporation (NYSE:MTRN)
Number of Hedge Fund Holders: 16
Market Capitalization as of August 19: $1.9 billion
Materion Corporation (NYSE:MTRN) produces advanced engineered materials. These materials use nickel and are supplied to the semiconductor, industrial, aerospace and defense, automotive, and consumer electronics industries. The company has an impressive dividend history stretching back close to a decade. In the past eight years, the payouts have registered consistent growth. On August 11, the firm declared a quarterly dividend of $0.125 per share, in line with previous. The forward yield was 0.53%.
On July 6, CL King analyst David Silver initiated coverage of Materion Corporation (NYSE:MTRN) stock with a Buy rating and a price target of $95, noting that the firm had developed a reputation as a reliable industrial supplier.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm ACK Asset Management is a leading shareholder in Materion Corporation (NYSE:MTRN), with 419,700 shares worth more than $35 million. Overall, at the end of the first quarter of 2022, 16 hedge funds in the database of Insider Monkey held stakes worth $119 million in Materion Corporation (NYSE:MTRN), compared to 18 in the previous quarter worth $118 million.
1. Ryerson Holding Corporation (NYSE:RYI)
Number of Hedge Fund Holders: 16
Market Capitalization as of August 19: $1.1 billion
Ryerson Holding Corporation (NYSE:RYI) processes and distributes industrial metals. On August 3, the company posted earnings for the second quarter of 2022, reporting earnings per share of $5.31, up from $1.24 per share over the same period last year. The revenue during the second quarter was $1.74 billion, up more than 22% compared to the revenue over the same period last year. The firm supplies nickel products to industries around the world and is based in Chicago.
On August 15, BMO Capital analyst Katja Jancic assumed coverage of Ryerson Holding Corporation (NYSE:RYI) stock with an Outperform rating and a price target of $35, backing the firm to deliver improved results through the cycle.
At the end of the first quarter of 2022, 16 hedge funds in the database of Insider Monkey held stakes worth $45 million in Ryerson Holding Corporation (NYSE:RYI), compared to 13 in the previous quarter worth $31 million. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Ryerson Holding Corporation (NYSE:RYI), with 357,851 shares worth more than $12 million.
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Disclosure. None. 10 Best Small-Cap Nickel Stocks to Buy Now is originally published on Insider Monkey.
