A quarry can sell crushed stone cheaply and still lose a job to a closer supplier. Stone is heavy and inexpensive per ton, so freight can wipe out a price advantage at the quarry. The U.S. Justice Department has treated construction aggregates as local markets in merger reviews for that reason. A well-located quarry may face only a few rivals within economical trucking distance. Our 11 Best Materials Stocks to Buy According to Hedge Funds covers how major aggregate suppliers serve those regional markets.
That local advantage can help a quarry raise delivered prices when diesel, wages or freight get more expensive. A miner selling into a global market cares more about the spread between metal prices and extraction costs. Both businesses can lose margin if costs rise faster than selling prices. In September, U.S. consumer prices rose 3.7% from a year earlier. According to the Associated General Contractors of America’s analysis of federal data, input prices for new nonresidential construction rose 11.9% and truck freight prices rose 19.3%.
Demand varies just as much as pricing power. As per AGC’s analysis of Census Bureau data, U.S. construction spending fell 2.7% year over year in September, but data center construction spending rose 90%. Private electric power construction rose 14%, and spending on highways and streets climbed 3.5%. Single-family construction fell 2.4%.
A supplier near a data center cluster can see orders grow, while a quarry that depends on new subdivisions ships less. The buildout also creates demand for materials used in power systems, a connection we explored in 10 Cheapest AI Data Center Stocks to Buy According to Billionaires.
Housing could supply new demand if borrowing costs ease. The Fed held its policy rate at 3.75% to 4% on October 28, and Freddie Mac mortgage survey reported a 7.18% average 30-year fixed mortgage rate on November 5. Lower mortgage rates could bring more buyers into the market and give builders a reason to start more homes. Meanwhile, a slowdown in data center construction could ease competition for some inputs while it cuts orders for suppliers serving those sites. Our 10 Best Housing Stocks to Buy in 2026 examines how builders use incentives when financing costs squeeze buyers.
These differences shape what a materials investor needs to watch. For an operating quarry, higher selling prices matter most if they protect profit per ton and orders hold up. For a mine developer, higher commodity prices may improve the project’s economics, but permitting, construction and financing still determine when it can make its first sale. Therefore, the same analyst’s upside figure can rest on very different assumptions about how a business will earn cash.
Our Methodology
We identified materials companies from the holdings of the Materials Select Sector SPDR ETF (XLB), the iShares U.S. Basic Materials ETF (IYM) and the Fidelity MSCI Materials Index ETF (FMAT), then widened the universe through targeted web searches. We screened US-listed companies across mining, metals, chemicals, construction materials, forestry products and packaging. We ranked the ten qualifying stocks with the highest implied upside to their average targets.
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. Insider Monkey’s quarterly newsletter strategy selects 14 small-cap and large-cap stocks every quarter and has returned 612% since May 2014, beating its benchmark by 375 percentage points (see more details here).
10. Almonty Industries Inc. (NASDAQ:ALM)
Analyst Upside Potential: 152.32%
Tungsten prices rose, and Almonty Industries Inc.’s (NASDAQ: ALM) second-quarter revenue climbed 498% year over year to C$43.0 million. Adjusted EBITDA came in at C$17.6 million, a swing from an adjusted EBITDA loss of C$4.8 million a year earlier. In the first half, the company brought in C$31.6 million in operating cash, after using C14.9 million over the same stretch last year. It also raised $800 million through convertible notes and finished June with about C$1.2 billion in cash.
Price drove those gains. Volume is the next question, and it depends on Sangdong in South Korea. The mine got final operating certificates for its Phase I processing plant and crushing facilities in September, and management reported a first commercial shipment in October. Almonty aims for about 640,000 tonnes of annual ore throughput once Phase I runs at full capacity. A July amendment lifted the volume under its long-term supply contract by 40%. To turn that contract into sales, the mine has to hold steady throughput and recoveries while it ramps up.
Analyst consensus forecasts predict exponential growth for Almonty Industries Inc. in fiscal year 2027, as the flagship Sangdong Mine in South Korea completes its initial ramp-up and enters full-scale operations. Official management guidance heavily coordinates with long-term take-or-pay offtake agreements covering 90% of their output, placing the company on a highly visible path to sustained cash generation over the next 12 months.
Our earlier 12 Undervalued Stocks to Buy According to Wall Street covered Sangdong when it began processing ore, before it shipped concentrate to a customer.
9. Perpetua Resources Corp. (NASDAQ:PPTA)
Analyst Upside Potential: 154.67%
On November 4, Perpetua Resources Corp. (NASDAQ:PPTA) reported gold and antimony drill results near a planned pit at its Stibnite project in Idaho. At the Fiddle target, about 750 meters south of the permitted Yellow Pine pit, the first hole intersected a 109.7-meter interval grading 3.2 grams of gold per tonne and 1.1% antimony. Perpetua needs more drilling and technical work before it can bring the discovery into a mine plan. A separate U.S. Army award offers up to $40 million for tungsten exploration, and Perpetua matches the contribution.
Stibnite has yet to make commercial mining revenue. Higher exploration and pre-development spending widened the June-quarter net loss to $97.5 million from $6.0 million a year earlier. Perpetua had $574.2 million in unrestricted cash and equivalents at quarter-end. The U.S. Export-Import Bank’s board approved a $2.9 billion loan. But Perpetua still has to meet loan closing conditions as it works toward a final investment and construction decision.
For an earlier step in that process, 9 Best Junior Gold Mining Stocks to Buy Now covers Perpetua’s appointment of Stibnite’s engineering and construction manager.
8. PureCycle Technologies, Inc. (NASDAQ: PCT)
Analyst Upside Potential: 159.86%
PureCycle Technologies, Inc. (NASDAQ: PCT)’s Ironton, Ohio, plant produced 5.2 million pounds of recycled resin in the third quarter, up from 4.5 million in the June quarter. Revenue fell to $2.3 million from $4.5 million in the prior quarter and $2.4 million a year earlier. Operating issues at the plant and customer delays contributed to the decline. The company posted a $37.5 million operating loss, and a $58.6 million noncash warrant gain helped it report $6.9 million in GAAP net income.
A New Jersey regulatory extension pushed roughly 15 food-contact programs out of the fourth quarter. Management estimates those programs could eventually use about 50 million pounds of resin a year. Two cold-cup programs qualified, but the company was still negotiating the supply agreement. It began shipping resin by rail for hot-drink lids in October.
PureCycle ended September with $109 million in cash and equivalents and an undrawn $200 million revolver. Management expects lower project spending in 2027. Order timing will determine how quickly Ironton can spread its costs over more sales. Our 10 Best Recycling Stocks to Buy According to Hedge Funds covered the company when it made its first resin sales.
7. Lithium Americas Corp. (NYSE:LAC)
Analyst Upside Potential: 161.66%
Lithium Americas Corp. (NYSE:LAC) expects to spend $1.3 billion to $1.6 billion on Phase 1 of Thacker Pass in 2026. That spending makes the construction schedule central to the Nevada lithium developer’s cash needs. At the end of June, it held $1.28 billion in cash and restricted cash, including $530.3 million at the project joint venture. A $342 million June advance brought cumulative U.S. Department of Energy loan draws to $1.21 billion.
Management said the plant was moving into piping and electrical work and targeted site energization for the fourth quarter of 2026. It expects mechanical completion in late 2027 and a ramp toward commercial production through 2028. Phase 1 has a design capacity of 40,000 tonnes of battery-grade lithium carbonate a year. Until sales begin, a delay can extend the period of spending before the project generates cash. Our 7 Best Lithium and Battery Stocks to Buy Right Now covered the earlier financing and construction work.
The June-quarter net income of $2.2 million attributable to shareholders, versus a $12.4 million loss a year earlier, included gains on the valuation of warrants and a derivative. Thacker Pass had yet to generate commercial lithium revenue.
6. Osisko Gold Group Inc. (NYSE:OGG)
Analyst Upside Potential: 168.24%
Osisko Gold Group Inc. (NYSE:OGG) lowered its year-end target for underground development at Cariboo to about 360 meters a month from 500, noting slower excavation and winter construction constraints. The company estimated the British Columbia gold project was 28% complete at September 30, based on costs incurred. It kept its target of a first gold pour in the first quarter of 2029 and commercial production in the second half. Slower excavation could raise costs ahead of the mine’s first sales.
Osisko’s current sales come from small-scale activity at Tintic in Utah. Its second-quarter revenue rose to C$32.7 million from C$6.9 million a year earlier as it sold 5,547 ounces of gold. The company reported a C$8.1 million operating income, and ended June with C$837.3 million in cash and equivalents.
In September, Osisko closed a US$600 million senior secured note offering at 9.25% and used part of the proceeds to repay its previous project facility. Management expects its funding to carry Cariboo through commercial production. Our 11 Best Gold Stocks to Buy for 2026 covered an earlier financing round, when the company still went by Osisko Development.
5. Lithium Argentina AG (NYSE:LAR)
Analyst Upside Potential: 185.24%
Lithium Argentina AG (NYSE:LAR) wants the cash from its existing brine operation to help fund the next stage of growth. A September scoping study examined adding 45,000 tonnes of annual lithium carbonate equivalent capacity at Cauchari-Olaroz.
Management plans to start with a 10,000-tonne module and expects to fund the expansion through project cash flow and debt. The company also closed a separate $180 million strategic investment in September. A phased build limits the capital needed upfront, while weaker lithium prices could leave less cash for later phases.
Higher realized lithium prices lifted Lithium Argentina’s share of Cauchari-Olaroz earnings to $12.3 million in the June quarter from a $400,000 share of loss a year earlier. The company earned $1.3 million, reversing a $4.1 million net loss. Exar, the project operator, generated $174 million in revenue and $142.4 million in operating cash flow, compared with $15.3 million of cash use a year earlier.
7 Best Steel and Metal Stocks to Buy for Energy Infrastructure looks at where Lithium Argentina fits in the supply chain for batteries and energy storage.
4. Nouveau Monde Graphite Inc. (NYSE:NMG)
Analyst Upside Potential: 225.06%
Québec granted Nouveau Monde Graphite Inc. (NYSE:NMG) the right to mine its Matawinie deposit on November 2. Construction was already underway at the graphite project. By the end of June, Nouveau Monde had incurred C$33million in project costs and committed C$167 million. It ended June with C$461 million in cash after completing the mine’s equity financing package and used C$20.8 million in operating cash in the first half.
The other project, Bécancour, would process graphite into battery material. Management estimated C$374 million in capital costs for a plant with 13,000 tonnes of annual capacity and targeted an investment decision in the second half of 2026. The plant could give Nouveau Monde a second product to sell alongside mine output.
Our earlier 11 Most Promising EV Battery Stocks According to Analysts examined Nouveau Monde’s plans to supply graphite to battery makers.
3. NioCorp Developments Ltd. (NASDAQ:NB)
Analyst Upside Potential: 244.11%
NioCorp Developments Ltd. (NASDAQ:NB) has secured a buyer for half the planned ferroniobium output at its Elk Creek project in Nebraska. The binding October agreement covers 15 years on a take-or-pay basis. Deliveries depend on financing, construction and the start of commercial production. The U.S. Export-Import Bank separately reiterated a target to finance about 65% of the estimated $1.85 billion in upfront capital costs, subject to due diligence. NioCorp still needs to secure financing before it can turn its sales agreement into deliveries.
The company reported $3.7 million of net income attributable to shareholders in preliminary, unaudited September-quarter figures, compared with a $42.7 million loss a year earlier. About $8.5 million in noncash gains on earnout shares and warrants helped drive the result. NioCorp used $6.1 million in operations and $5.9 million in investing, mostly for mine portal work, and finished September with $405.1 million in cash. Our 10 Best Metal Stocks to Buy Right Now covered the portal’s original approval and how it would provide access to the deposit.
2. USA Rare Earth, Inc. (NASDAQ:USAR)
Analyst Upside Potential: 319.86%
USA Rare Earth, Inc. (NASDAQ:USAR)’s June-quarter sales came entirely from Less Common Metals, which makes rare-earth metals and alloys. The business contributed $5.8 million in revenue. USA Rare Earth recorded a $1.6 million consolidated gross loss and a $46.3 million operating loss, up from $8.8 million a year earlier. Operating cash use rose to $56.9 million from $7.9 million, and the company held $1.53 billion in cash and equivalents at June 30.
The Serra Verde acquisition closed in September, adding a producing mine and processing operation in Brazil. In the U.S., management targeted annualized magnet-making capacity of 600 metric tonnes at Stillwater, Oklahoma, in the fourth quarter. The firm also broke ground in South Carolina, where it targets the start of commissioning in 2028. Our 8 Best Rare Earth Stocks to Buy in 2026 follows the company’s effort to connect mining, metals and magnet manufacturing.
The company signed definitive agreements with the U.S. Department of Commerce in June for up to $1.6 billion in funding and loan capacity. Disbursements depend on project milestones. That financing can help cover the U.S. buildout. However, profitability will depend on whether the new operations generate enough gross profit to cover a larger cost base.
1. TMC the metals company Inc. (NASDAQ:TMC)
Analyst Upside Potential: 376.19%
TMC the metals company Inc. (NASDAQ:TMC)’s valuation hinges on whether it can secure permission to recover nickel, copper, cobalt and manganese from seafloor nodules and do so at a cost that leaves room for profit. Management targeted commissioning the offshore collection system in the fourth quarter of 2027. Meeting that target depends on permits and equipment readiness.
Our 12 Best Nickel Stocks to Buy According to Hedge Funds traces TMC’s earlier move toward a U.S. licensing route.
With commercial sales still ahead, the time TMC spends in permitting and development matters for its cash needs. The company used $20.1 million in operating cash in the June quarter, including $9 million of equity-award remittances. Its net loss narrowed to $60.1 million from $74.3 million a year earlier. TMC ended June with $98.7 million in cash and no financial debt. In August, management said that cash should cover working capital and capital commitments for at least 12 months from the report.
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