In this article, we will look at 10 cheap nickel stocks to invest in today. We will also see how volatile the nickel market has gotten, and how the commodity has surged amid the Ukraine crisis. To jump ahead to the top stocks to consider, check out 5 Cheap Nickel Stocks to Invest In Today.
Nickel is one of the most widely used metals today. From being used to make coins to its use by the electric automobile industry to make high-capacity batteries so drivers can get the most mileage off a full charge, nickel has a broad range of industrial applications. According to HSBC metals and mining analysts, the demand for nickel in 2021 from batteries was roughly 11% of the overall demand for the metal.
According to Global Data, global nickel production was projected to reach 2.42 million tonnes in 2021, growing at a rate of 6.8% for the year. The production of the metal suffered in 2020 by 4.2%, dropping the production number to 2.27 million tonnes.
According to Knoema, nickel prices sat at $17,577 per tonne in the second quarter of 2021, up 44% year-over-year, from $12,179 per tonne. The World Bank estimated nickel prices would drop to $16,000 per tonne at some point in 2022, and reach a maximum of $18,000 per tonne by the end of the year. This may have been the case if Vladimir Putin had not gone to war against Ukraine.
Commodity Prices Reach Record Highs
The Russian invasion of Ukraine has resulted in increased market volatility and surging inflation. The sanctions imposed on Russia have not only resulted in oil prices rallying to $130 per barrel but have also caused other commodity prices to reach record highs as well. Gold prices were pushed up to $2000 per ounce, Copper hit an all-time high of $10,070 per tonne, but none of these commodities made the London Metal Exchange halt trading, except for nickel.
Nickel Prices Soar
Russia is responsible for supplying 10% of nickel around the world. The sanctions placed on Russia caused supply chain disruptions which in turn caused nickel prices to rise. On March 8, 2022, the London Metal Exchange was forced to halt the trading of nickel after the prices for the commodity rose exponentially. The London Metal Exchange's three-month nickel contract on March 7, 2022, climbed to $54,880 per tonne, up from $25,000 per tonne a week earlier. The price continued to rise exponentially, skyrocketing to $101,365 per tonne, before dipping to $80,000 within 24 hours, at which point trading was suspended.
Among some of the most famous nickel mining companies are BHP Group (NYSE: BHP), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE:NEM). However, these stocks did not rank among the 10 cheap nickel stocks to invest in today since their share prices are not budget-friendly. Read on to see the 10 cheap nickel stocks to invest in today.
10 Cheap Nickel Stocks to Invest In Today
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For our list of 10 cheap nickel stocks to invest in today, we scoured Reddit forums and looked up mining companies that are popular among hedge funds and whose share prices are under $40. We included the hedge fund sentiment and analyst ratings for each stock. We believe that the hedge fund sentiment for a stock can allow our readers to gain more perspective when looking for investment options, and can help them make informed investment decisions. Companies are ranked according to their share price, in descending order.
Note: All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q4 2021 reporting period.
Without further ado, let's look at 10 cheap nickel stocks to invest in today.
10 Cheap Nickel Stocks to Invest In Today10. Allegheny Technologies Incorporated (NYSE:ATI)
Number of Hedge Fund Holders: 27
Share Price as of March 11: $26.84
Allegheny Technologies Incorporated (NYSE:ATI) manufactures and markets specialty materials and components worldwide. In February, JPMorgan analyst Seth Seifman raised his price target on Allegheny Technologies (NYSE:ATI) to $31 from $26, while maintaining an 'Overweight' rating on the shares.
On February 2, 2022, Allegheny Technologies Incorporated (NYSE:ATI) announced its earnings for the fiscal fourth quarter of 2021, which ended up being a profitable quarter for the company. Allegheny's earnings per share came in at $0.25, beating estimates by $0.14. Allegheny Technologies Incorporated (NYSE:ATI) generated revenue of roughly $765.40 million, up 16.27% year-over-year from $658.30 million, and beating revenue estimates by $42.20 million. Moreover, the stock has gained 50.06% over the past six months.
As of the fourth quarter of 2021, 27 hedge funds held stakes in Allegheny Technologies Incorporated (NYSE:ATI) worth over $230 million. This is compared to 26 positions in the previous quarter, with a total value of $256.15 million. The hedge fund sentiment for Allegheny Technologies Incorporated (NYSE:ATI) is therefore positive and likely to continue on that trajectory in 2022.
As of March 3, 2022, D E Shaw is the leading stakeholder in the company among the funds tracked by Insider Monkey, owning a stake worth $57.84 million. The investment accounts for 0.04% of the hedge fund's investment portfolio.
9. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 25
Share Price as of March 11: $19.08
Vale S.A. (NYSE:VALE) produces and sells iron ore and iron ore pellets for use as raw materials in steelmaking in Brazil and internationally. The company operates through three segments: Ferrous Minerals, Base Metals, and Coal. The Base Metals segment produces and extracts nickel and its by-products.
As of March 11, 2022, the stock has a forward dividend yield of 7.47% and boasts 3 years of consistent dividend increases. On top of this, Vale S.A. (NYSE:VALE) shares have gone up by 38.09% year-to-date.
Earlier this month, Deutsche Bank analyst Liam Fitzpatrick raised his price target on Vale S.A. (NYSE:VALE) to $20 from $19 and reiterated a 'Buy' rating on the shares.
Vale S.A. (NYSE:VALE) was spotted in 25 hedge funds' portfolios as of the end of the fourth quarter of 2021, with the total value of these hedge funds' positions in the company being valued at $1.71 billion. Fisher Asset Management was the primary stakeholder in the company by value, owning a stake in Vale S.A. (NYSE:VALE) worth approximately $434.3 million.
Here's Miller Value Partners' take on the stock from the fund's Q3 2021 investor letter:
“Vale (VALE) was the top detractor over the quarter, falling 32.6% in sympathy with iron ore’s 48% decline from record highs on China capacity curbs and growing fears of financial issues within the property sector. Vale reported Q2 EBITDA of $11.24Bn, slightly below consensus of $11.47Bn on higher than expected iron ore cash costs. Free cash flow of $6.5Bn (35% annualized yield) came in well ahead of expectations, driving $2.6Bn of stock buybacks and a 1H21 dividend of $7.6Bn, implying year-to-date (YTD) shareholder returns of roughly $13.8Bn (19% of the current market cap). Management maintained FY21 production guidance for iron ore of 315-335 Metric tons (Mt) and lowered year-end 2022 exit capacity to 370Mt (from 400Mt) due to Northern System licensing delays. Additionally, the company hosted their annual Investor Day, outlining new production initiatives aimed at becoming a key supplier to steelmakers in light of decarbonization goals.”
8. Sibanye Stillwater Limited (NYSE:SBSW)
Number of Hedge Fund Holders: 10
Share Price as of March 11: $17.83
Sibanye Stillwater Limited (NYSE:SBSW) is a precious metals mining company. The company produces gold, platinum group metals, and by-products such as nickel, copper, and chrome as well. On February 4, 2022, Sibanye Stillwater Limited (NYSE:SBSW) announced that it had completed the acquisition of the Sandouville nickel hydrometallurgical processing facility from Eramet SA after fulfilling the terms and conditions on the Share Purchase Agreement which was signed last November.
In early-March, Sibanye-Stillwater (NYSE:SBSW) reported that its revenue for 2021 was $11.6 billion, up 35% year-over-year. As of March 11, 2022, the stock has a forward dividend yield of 7.24% and has gained 22.66% over the past six months.
On March 10, 2022, Deutsche Bank analyst Liam Fitzpatrick raised his price target on Sibanye Stillwater (NYSE:SBSW) to $21 from $18.50 and maintained a 'Buy' rating on the shares.
Sibanye Stillwater (NYSE:SBSW) is growing slightly popular among hedge funds. At the close of the fourth quarter of 2021, 10 hedge funds held stakes in the company, worth roughly $166.03 million. This is compared to 9 hedge funds in the third quarter, with stakes worth $141.72 million. Condire Investors is the largest stakeholder in the company among that group, owning a position valued at $60.73 million. The investment accounts for a sizable 12.08% of the value of the fund's Q4 2021 portfolio.
Other nickel stocks that are popular among hedge funds today include BHP Group (NYSE:BHP), Rio Tinto Group (NYSE:RIO), and Newmont Corporation (NYSE:NEM).
Desert Lion Capital, an investment management firm, shared its insights on Sibanye Stillwater (NYSE:SBSW) in its Q3 2021 investor letter. Here's what the firm had to say:
“Sibanye Stillwater is one of the largest PGM (platinum group metal) producers in the world with major operations in South Africa and the U.S. They also have gold mining operations in SA. There is significant upside optionality in their growing lithium, nickel, and uranium activities, which are not yet contributing to earnings and not recognized by the market in SSW’s price.
During the third quarter, the company reported record earnings for the interim period ended June 2021. TTM EPS was R12.03, placing the stock on a PE multiple of 4. Cash generation was excellent, and the company is effectively debt free with surplus net cash. The management team continues to stay disciplined in their capital allocation, using cash profits to settle debt, repurchase 5% of the company’s shares at a discount, pay a healthy dividend (~11% annualized dividend yield), and expand their battery metals strategy with lithium and nickel acquisitions… (Click here to see the full text)
..Sibanye Stillwater is a well-managed, profitable business with excellent capital allocation discipline. I view it as a dividend-paying call option on the normalization of auto manufacturing, climate change initiatives, and inflation. The company’s lithium, nickel, and uranium activities also position them to participate in the continued drive towards “cleaner” energy, and so far, these options are not priced in at all.”
7. SilverCrest Metals Inc. (NYSE:SILV)
Number of Hedge Fund Holders: 12
Share Price as of March 11: $9.21
SilverCrest Metals Inc. (NYSE:SILV) was spotted in 12 hedge funds' portfolios as of the close of 2021, with their collective holdings valued at $108.64 million, up from $90.57 million in the third quarter of 2021, when 13 hedge funds held stakes in the company.
Sprott Asset Management is the largest shareholder in the company among those 12 funds, owning more than 7.4 million SilverCrest Metals Inc. (NYSE:SILV) shares valued at $58.8 million, which accounts for 3.69% of Sprott Asset's fourth quarter 2021 investment portfolio.
In February, Desjardins analyst Jonathan Egilo initiated coverage of SilverCrest Metals Inc. (NYSE:SILV) with a 'Buy' rating and gave the stock a price target of C$15.25 ($11.99).
6. PolyMet Mining Corp. (NYSE:PLM)
Number of Hedge Fund Holders: 5
Share Price as of March 11: $3.60
PolyMet Mining Corp. (NYSE:PLM) explores for and develops natural resource properties. Its primary mineral property is the NorthMet project, a polymetallic project that hosts copper, nickel, cobalt, gold, silver, and platinum group metals. As of March 11, 2022, the share price for PolyMet Mining Corp. (NYSE:PLM) sits at $3.60 and the stock has gained 9.39% over the past six months.
Alan S. Parsow's Elkhorn Partners is the dominant shareholder in PolyMet Mining Corp. (NYSE:PLM) among the funds tracked by Insider Monkey's database. The fund's stake in PolyMet Mining Corp. (NYSE:PLM) is valued at $305 million, which covers 0.17% of Elkhorn Partners' 13F portfolio value.
By the end of the fourth quarter of 2021, five hedge funds held stakes in PolyMet Mining Corp. (NYSE:PLM) worth $754 million, up from $602 million in stakes a quarter earlier, which were also held by the same five hedge funds. Three of those funds made substantial additions to their PLM positions during Q4.
PolyMet Mining Corp. (NYSE:PLM) is one of the cheapest nickel stocks to invest in today. Other not-so-budget-friendly stock options include BHP Group (NYSE: BHP), Rio Tinto Group (NYSE: RIO), and Newmont Corporation (NYSE:NEM).
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Disclose. None. 10 Cheap Nickel Stocks to Invest In Today is originally published on Insider Monkey.