In this article, we will discuss the 8 Best Basic Materials Stocks to Buy According to Hedge Funds.
On May 1, Chris Harvey of CIBC appeared on CNBC’s ‘Closing Bell’ to discuss the current state of the equity markets, noting his surprise at the speed with which the S&P and NASDAQ have reached new intraday highs. While he previously anticipated a buying opportunity and maintained that equities would rise, the rapid pace of the recovery has led his firm to become more conservative. Harvey expressed a desire to avoid being greedy, suggesting that the market now needs time to digest its recent gains. He identified several factors that warrant caution, including the need for Kevin Warsh to be officially seated at the Fed and the fact that peace has not yet been achieved in the Middle East.
Exploring why the market seems to have looked past the turmoil in the Middle East, Harvey explained that investors are currently laser-focused on an undeniably strong earnings story. He notes that while guidance for companies benefiting from AI has been very good, guidance for general cyclical companies remains uncertain and unclear, which gives him pause.
Global Market Insights has previously reported that the global building materials market, valued at $824.4 billion in 2023, is projected to reach $1.4 trillion by 2032 with a CAGR of 6.2%, driven by rapid urbanization, population growth, and a rise in renovation activities. Despite challenges like fluctuating raw material prices, the industry is being transformed by smart architecture (such as self-healing concrete and thermochromic glass) and advanced manufacturing techniques like 3D printing and mass prefabrication. These innovations are streamlining construction processes, reducing waste, and improving energy efficiency, effectively setting new standards for modern structural design and quality control.
Our Methodology
We used the Finviz Stock Screener to identify basic materials stocks, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among analysts and elite hedge funds. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2025.
Note: All data was sourced on May 8.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
8 Best Basic Materials Stocks to Buy According to Hedge Funds
8. Rio Tinto (NYSE:RIO)
Number of Hedge Fund Holders: 38
Rio Tinto (NYSE:RIO) is one of the best basic materials stocks to buy according to hedge funds. On April 29, the Clontarf Foundation and Rio Tinto extended their 18-year partnership for an additional 5 years to continue improving education and employment outcomes for young Aboriginal and Torres Strait Islander men. Since the collaboration began in 2008, the Clontarf network has grown from 17 academies to 161, now supporting over 12,000 participants daily. The program focuses on building self-esteem and cultural identity to help students stay connected to their schools and communities.
A recent 2025 independent evaluation highlighted the program’s effectiveness, reporting an 88% school retention rate and an 82% Year 12 completion rate among participants. Beyond the classroom, the partnership facilitates practical career pathways through worksite visits, mentoring, and direct employment opportunities. These initiatives are designed to bridge the gap between graduation and meaningful long-term employment or further study.
Rio Tinto’s (NYSE:RIO) leadership emphasized that backing young people to believe in themselves creates lasting positive change across Australia. By continuing this support, the organizations hope to further enhance the resilience and leadership skills of the men involved. The extension ensures that the established model of fostering healthy lifestyles and positive relationships will remain a cornerstone of their joint community investment strategy through the end of the decade.
Rio Tinto (NYSE:RIO) is a global mining company. It produces gold primarily as a byproduct of its large-scale copper mining operations, most notably at the Kennecott mine in the US. The company extracts high-purity gold from electrolytic slimes generated during copper refining, which it sells as part of its diversified metals portfolio.
7. Air Products and Chemicals Inc. (NYSE:APD)
Number of Hedge Fund Holders: 44
Air Products and Chemicals Inc. (NYSE:APD) is one of the best basic materials stocks to buy according to hedge funds. On April 30, Air Products reported FQ2 2026 earnings, with GAAP EPS of $3.19 and adjusted EPS of $3.20, a 19% increase year-over-year. Sales rose 9% to $3.2 billion, driven by higher on-site volumes and productivity gains across all major regions. The company also made strides in the electronics and aerospace sectors, securing a deal with Samsung for a semiconductor fab in South Korea and supporting NASA’s Artemis II mission with critical hydrogen and helium supplies.
To combat market volatility, the company is prioritizing helium supply chain resilience by using its US storage cavern and increasing domestic liquefaction. While helium pricing presented a headwind, it was largely mitigated by pricing improvements in other product lines and cost-saving initiatives. Consequently, Air Products and Chemicals Inc. (NYSE:APD) raised its full-year FY2026 adjusted EPS guidance to a range of $13.00 to $13.25 and set FQ3 guidance at $3.25 to $3.35.
The company maintains a disciplined capital approach, with FY2026 capital expenditures expected to remain at ~$4.0 billion. Growth was notably balanced across segments, with Asia seeing a 25% increase in operating income and the Americas benefiting from higher merchant and on-site volumes. CEO Eduardo Menezes emphasized that the firm remains focused on unlocking earnings growth and optimizing large-scale projects despite ongoing macroeconomic uncertainty.
Air Products and Chemicals Inc. (NYSE:APD) manufactures and distributes atmospheric gases. It operates in the Americas, Asia, Europe, the Middle East, India, and Corporate and Other.
