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 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. 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. manufactures and distributes atmospheric gases. It operates in the Americas, Asia, Europe, the Middle East, India, and Corporate and Other.
6. Corteva Inc. (NYSE:CTVA)
Number of Hedge Fund Holders: 48
Corteva Inc. (NYSE:CTVA) is one of the best basic materials stocks to buy according to hedge funds. On May 5, Corteva delivered a strong start to 2026, reporting Q1 net sales of $4.9 billion, an 11% increase year-over-year. This growth was fueled by robust demand for its technology portfolios, with Seed sales rising 12% and Crop Protection sales increasing 10%. Operating EBITDA grew 21% to $1.44 billion, reflecting disciplined cost management and a 33% surge in operating EPS to $1.50, as the company benefited from favorable product mix and seasonal timing shifts in North America.
The company remains on track to complete its corporate separation into two independent entities in Q4 2026. Key milestones achieved include the filing of its initial Form 10, the naming of executive leadership teams, and the branding of its future seed and genetics business as Vylor. To strengthen its financial position ahead of the split, Corteva’s board approved a $1.5 billion pre-tax contribution to its US pension plan and plans to repurchase $500 million in shares during H1 of the year.
Corteva Inc. reaffirmed its full-year 2026 guidance, projecting operating EBITDA between $4.0 billion and $4.2 billion and operating EPS in the range of $3.45 to $3.70. Despite competitive pricing pressures in Latin America, management anticipates sustained volume growth driven by a solid Northern Hemisphere planting season and tightening global supply-demand dynamics.
Corteva Inc. is an agriculture technology company. The company provides seed and crop protection solutions.
5. Ecolab Inc. (NYSE:ECL)
Number of Hedge Fund Holders: 62
Ecolab Inc. (NYSE:ECL) is one of the best basic materials stocks to buy according to hedge funds. On April 29, Ecolab Life Sciences opened a new Bioprocessing Applications Lab in Dongtan, Korea, marking its first such facility in Asia. This center is designed to support biopharmaceutical manufacturers in one of the world’s most advanced markets by providing local access to technical expertise and process development. The expansion strengthens Ecolab’s global network, building on existing capabilities in the US and the UK to better serve the growing demand for biosimilars and advanced therapies.
The new facility facilitates hands-on collaboration to help customers optimize purification processes and accelerate the transition from early-stage testing to commercial-scale manufacturing. By establishing a local presence, Ecolab enables regional manufacturers to avoid the complexities of overseas material transfers, improving speed to market and operational efficiency. The lab will focus on enhancing cost-effectiveness while ensuring alignment with rigorous global regulatory and performance standards.
This investment reflects a long-term commitment to the life sciences industry and follows recent innovations in the company’s bioprocessing portfolio, such as affinity resin technologies. Management highlighted that the center allows Ecolab Inc. to work side-by-side with Asian customers to address increasing pressure to scale production quickly.
Ecolab Inc. provides water, hygiene, and infection prevention solutions and services that protect people and critical resources. Its Global Industrial segment offers water treatment and process applications, along with cleaning and sanitizing solutions, primarily for large industrial customers.
4. The Sherwin-Williams Company (NYSE:SHW)
Number of Hedge Fund Holders: 83
The Sherwin-Williams Company (NYSE:SHW) is one of the best basic materials stocks to buy according to hedge funds. On April 28, Sherwin-Williams reported a 6.8% increase in consolidated net sales to $5.67 billion for Q1 2026, driven by growth across all reportable segments and the recent acquisition of Suvinil. Diluted net income per share rose 7.5% to $2.15, while adjusted EPS reached $2.35. Despite global economic uncertainty and soft demand in certain end markets, the company achieved gross margin expansion and record EBITDA of $998.2 million, supported by moderating raw material costs and effective share-of-wallet strategies.
Performance across segments was led by the Consumer Brands Group, which saw a 19.2% sales surge primarily due to the Suvinil acquisition and strong performance in Europe. The Paint Stores Group grew 3.7%, supported by professional markets like protective and marine coatings, which offset a slight decline in new residential sales. Meanwhile, the Performance Coatings Group increased sales by 6.5%, with double-digit growth in Automotive Refinish. The company also remained active in shareholder returns, distributing $772.7 million through dividends and the repurchase of 1.6 million shares.
Looking ahead, the Sherwin-Williams Company reaffirmed its full-year 2026 adjusted diluted net income guidance of $11.50 to $11.90 per share. Management anticipates continued market volatility and potential inflationary pressures in logistics and raw materials, prompting targeted price increases and aggressive cost-reduction actions.
The Sherwin-Williams Company is a global leader in the manufacture, development, distribution, and sale of paints, coatings, and related products to professional, industrial, commercial, and retail customers.
3. CRH plc (NYSE:CRH)
Number of Hedge Fund Holders: 88
CRH plc (NYSE:CRH) is one of the best basic materials stocks to buy according to hedge funds. On April 30, CRH reported a strong start to 2026, with Q1 revenues rising 9% to $7.4 billion. This was fueled by positive underlying demand, disciplined pricing, and contributions from recent acquisitions, particularly within the Americas Materials Solutions segment, which saw a 21% revenue increase. While the company recorded a net loss of $0.2 billion due to higher depreciation and impairment charges, Adjusted EBITDA grew by 18% to $0.6 billion.
The company is actively reshaping its portfolio by reallocating capital toward higher-growth water infrastructure and utility markets. CRH agreed to $1.9 billion in divestitures across non-core businesses, including its construction accessories and lawn and garden operations. Simultaneously, it is investing $0.9 billion in nine acquisitions, highlighted by the $0.7 billion agreement to acquire Axius Water to strengthen its position in the specialized water quality solutions sector in North America.
CRH plc (NYSE:CRH) reaffirmed its full-year 2026 guidance, projecting net income between $3.9 billion and $4.1 billion and Adjusted EBITDA in the range of $8.1 billion to $8.5 billion. The company continues to return value to shareholders, declaring a 5% increase in its quarterly dividend to $0.39 per share and initiating a new $0.3 billion share buyback tranche.
CRH plc (NYSE:CRH) manufactures and distributes a wide range of superior building materials and products used in infrastructure, commercial, residential, and public construction projects worldwide.
2. Linde (NASDAQ:LIN)
Number of Hedge Fund Holders: 89
Linde (NASDAQ:LIN) is one of the best basic materials stocks to buy according to hedge funds. On May 1, Linde reported solid Q1 2026 results, with sales rising 8% to $8.8 billion and adjusted EPS increasing 10% to $4.33. This was driven by a 3% increase in underlying sales, supported by price attainment and project start-ups, particularly in the Americas and APAC regions. The company maintained a strong adjusted operating profit margin of 30.0% and generated $2.2 billion in operating cash flow, returning over $1.5 billion to shareholders through dividends and stock repurchases.
Segment performance remained resilient despite challenging global conditions, with the Americas seeing a 10% sales increase led by the electronics and manufacturing sectors. While the APAC region experienced 11% sales growth fueled by chemical and energy project start-ups, the EMEA region saw a slight 2% dip in underlying sales due to lower volumes. Linde Engineering contributed $517 million in sales and maintained a third-party equipment backlog of $2.8 billion.
Looking forward, Linde raised its full-year 2026 adjusted EPS guidance to a range of $17.60 to $17.90, representing 7% to 9% growth. The company expects capital expenditures between $5.0 billion and $5.5 billion to support its $7.1 billion contractual project backlog.
Linde is a global industrial gas and engineering firm. It designs and manufactures industrial gas production equipment. The company also provides gas production and processing services for olefin plants, natural gas plants, air separation plants, hydrogen and synthesis gas plants, and other plants.
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 91
Freeport-McMoRan Inc. (NYSE:FCX) is one of the best basic materials stocks to buy according to hedge funds. On April 23, Freeport-McMoRan reported Q1 2026 net income of $881 million, with adjusted earnings of $0.57 per share. Operating results exceeded earlier estimates, supported by consolidated production of 662 million pounds of copper, 97 thousand ounces of gold, and 22 million pounds of molybdenum. The company maintained a strong liquidity position with $3.7 billion in cash, ending the quarter with a net debt of $2.4 billion, excluding downstream processing facilities in Indonesia.
Operational highlights included the March phased ramp-up of the Grasberg Block Cave underground mine and a new MOU with the Indonesian government to extend operating rights beyond 2041. While the ramp-up schedule was adjusted to modify ore loading systems, the company continues to progress major organic growth projects. These include a potential expansion at El Abra in Chile, for which an environmental impact statement was recently submitted, and ongoing leaching technology innovations in the US.
For the full year 2026, Freeport-McMoRan Inc. expects consolidated sales of ~3.1 billion pounds of copper and 650 thousand ounces of gold. Operating cash flows for the year are projected to reach $8.7 billion, assuming copper prices remain near $6.00 per pound. The company remains focused on capital discipline, with $4.3 billion earmarked for 2026 capital expenditures to support its pipeline of near and long-term growth options.
Freeport-McMoRan Inc. is a leading global mining company that operates the Grasberg minerals district in Indonesia, one of the world’s largest copper and gold mines. As a major byproduct of its copper operations, the company is a top-tier gold producer.
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