10 Metals Stocks with Insider Buying
In this piece, we will take a look at ten metals stocks with insider buying. If you want to skip out the introduction of the metals industry and insider transactions, then head on over to 5 Metals Stocks with Insider Buying.
The metals industry is one of the most important sectors that you might come across if the world is to shift to using renewable vehicles and power generation at a large scale. This is because of lithium, a material that is primarily used in battery production due to its suitability for battery performance. Australia and Chile have the largest lithium reserves in the world, and the Oceanic nation benefits, particularly from having a large share of global lithium production. Australia accounted for 47% of the global lithium production in 2022, courtesy of the six mining operations located there. Chile and Australia together account for most of the world's lithium output, with the South American country exporting large amounts of lithium to the U.S. as well. For more details, you can check out 10 Most Profitable Lithium Stocks Now and Lithium Reserves by Country: Top 15 Countries.
The surge in demand for lithium that is expected to come into play over the course of the next several years as countries lay down plans to gradually phase out internal combustion vehicles might outstrip the ability of the industry to supply the metal. Estimates from McKinsey show that global lithium demand is expected to rise from 500 thousand metric tons of lithium carbonate equivalent (LCE) in 2021 to as much as five million metric tons by as soon as 2030. To meet this demand, the consulting firm believes that the lithium industry has to use currently nascent technologies such as direct lithium extraction (LTE). The adoption of these technologies and the lithium mining firms' ability to meet demand are also hampered by the years of lead times between the discovery of lithium reserves and production output.
Considering this hype around lithium, one would believe that the metal is not only essential for electric vehicle production but also for the global shift to renewable power sources. However, this is not the case when we take a look at the list of materials that are crucial to the development of ten industries that will cumulatively drive fossil fuels away from the global economy. The list of industries includes hydrogen power, wind power, nuclear power, and other common names. It shows that iron is the most important metal for the shift to renewable energy since it is required in all of the ten industries through high steel demand. To see which countries produce the most iron ore, which is the backbone of modern day steel, do check out 16 Largest Iron Ore Producing Countries In The World.
Looking at these details, it's clear that the metals industry is crucial not only for today's world but also for the world of the future. While iron and lithium are primarily known for their industrial uses, another metal, gold, is used by both consumers and financial institutions. One of the oldest currencies in the world is gold, and it was also the standard behind the U.S. dollar until very recently. Gold is held by central banks as a reserve asset to maintain monetary liquidity, and its prices are often quite volatile as they are used as one of the handfuls of global economic barometers. We took a look at the companies part of the VanEck Gold Miners ETF and gathered the number of hedge funds that had invested in them as of Q1 2023 end to determine that Newmont Corporation (NYSE:NEM), Agnico Eagle Mines Limited (NYSE:AEM), and Barrick Gold Corporation (NYSE:GOLD) were some top hedge fund gold company stock picks.
Shifting gears to stock investing, there are several ways in which one can invest in the market. Any investing decision involves integrating various factors into the bigger picture about a firm and its shares. One such factor is insider transactions. Public reporting requirements make it mandatory for all stock purchases by directors and insiders with significant shareholdings in a firm to disclose these transactions. Directors are not allowed to trade stocks based on non public information, as doing so would otherwise distort the market, influence the fair price, and create an uneven balance of information between participants. Directors and others can however buy stock in 'window periods' which are typically decided on by the company. The SEC tracks insider stock transactions through multiple reporting requirements, and these are typically monitored by investors to gauge management's own sentiment towards their company. For some interesting insider transactions which came right before shares dropped, you should read 11 Stocks with Heavy Insider Buying in 2023.
As to how companies manage a tricky lithium market, here's what Tesla, Inc. (NASDAQ:TSLA)'s former chief financial officer had to say during the firm's latest earnings call:
On the commodity side, we are continuing to see improvements there, as we’ve discussed previously. Lithium is the most notable improvement so far. I think I commented on this on the last call, because typically, we see this coming about a quarter before it actually is realized in our financials.
And also just as a reminder, we’re not fully exposed to the price of lithium. Our supply chain team has done a terrific job in partnership with another – a bunch of other companies to put in place some long-term agreements here, but we do have some exposure that moves up and down. We’re also seeing benefits in aluminum and steel, which I think is great. Not as large as the lithium impacts, but they contribute nonetheless.
With this context, let's take a look at some metals stocks with an uptick in insider buying. The firms that top the list are Trilogy Metals Inc. (NYSE:TMQ), Paramount Gold Nevada Corp. (NYSE:PZG), and TMC the metals company Inc. (NASDAQ:TMC).
Our Methodology
We used Insider Monkey’s insider trading screener to make our list of metals stocks with the highest insider buying and ranked the companies according to insider ownership percentage change. Steel companies are also included in the list since their main product requires iron for manufacturing.
10 Metals Stocks with Insider Buying
10. Piedmont Lithium Inc. (NASDAQ:PLL)
6-Month Insider Ownership Change: 0.19%
Piedmont Lithium Inc. (NASDAQ:PLL) is an American lithium company headquartered in North Carolina. Most of its insider transactions have been sales this year, and only a director bought $105,000 worth of shares in March.
Insider Monkey took a look at 943 hedge funds for their first quarter of 2023 investments and discovered that 13 had owned Piedmont Lithium Inc. (NASDAQ:PLL)'s shares.
Along with Paramount Gold Nevada Corp. (NYSE:PZG), Trilogy Metals Inc. (NYSE:TMQ), and TMC the metals company Inc. (NASDAQ:TMC), Piedmont Lithium Inc. (NASDAQ:PLL) is a metals stock with insider buying in 2023.
9. Coeur Mining, Inc. (NYSE:CDE)
6-Month Insider Ownership Change: 0.85%
Coeur Mining, Inc. (NYSE:CDE) is an American gold mining company with operations in New Mexico, Alaska, South Dakota, and Canada. Its directors, chairman, and exploration and logistics executives have bought more than $100,000 worth of shares between February and April.
As of Q1 2023 end, 17 of. the 943 hedge funds part of Insider Monkey's database had invested in Coeur Mining, Inc. (NYSE:CDE). Out of these, the firm's largest investor is Paul Marshall and Ian Wace's Marshall Wace LLP through a stake worth $27 million.
8. U.S. GoldMining Inc. (NASDAQ:USGO)
6-Month Insider Ownership Change: 1.25%
U.S. GoldMining Inc. (NASDAQ:USGO) is an American gold exploration firm with an operational presence in its home state, Alaska. It held its IPO in April 2023, and since then, insiders and a director have bought more than a million dollars of stock. Since the IPO was held in April, no hedge fund had invested in U.S. GoldMining Inc. (NASDAQ:USGO) during this year's first quarter. With second quarter filings out soon, be on the lookout to see if this changes.
7. Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP)
6-Month Insider Ownership Change: 1.73%
Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) is a metalwork company that manufactures various kinds of steel alloys. It's one of the hidden stocks of 2023 when it comes to market performance since the shares are up by 100% year to date - a nice way to double your money. The stock price also makes it unsurprising that several directors have bought the shares this year, with some tens of thousands of dollars of purchases taking place in February before the shares took off.
Insider Monkey's March quarter of 2023 survey covering 943 hedge funds revealed that four had held a stake in the company. Out of these, Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP)'s largest investor is the firm Minerva Advisors since it owns 738,427 shares that are worth $6.7 million.
6. Friedman Industries, Incorporated (NYSE:FRD)
6-Month Insider Ownership Change: 1.87%
Friedman Industries, Incorporated (NYSE:FRD) is a steel manufacturer that supplies products to different industrial sectors such as transportation and construction. Its director Dr. Durga Agarwal bought 5,000 shares for $81,600 in July 2023.
Three of the 943 hedge funds part of Insider Monkey's Q1 2023 research had invested in Friedman Industries, Incorporated (NYSE:FRD). Jim Simons' Renaissance Technologies is the biggest stakeholder out of these due to its $4.5 million investment.
Trilogy Metals Inc. (NYSE:TMQ), Friedman Industries, Incorporated (NYSE:FRD), Paramount Gold Nevada Corp. (NYSE:PZG), and TMC the metals company Inc. (NASDAQ:TMC) are some metals stocks with insider buying.
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Disclosure: None. 10 Metals Stocks with Insider Buying is originally published on Insider Monkey.