Advanced Materials: The Next Frontier for Commodity Investors

Our society today thrives on technological breakthroughs; whether its smarter sensors or more efficient semiconductors, we are constantly seeking out ways to improve our everyday lives. When we think about the basic materials market, resources like timber, steel, and copper generally come to mind first; however, what is often overlooked is the development of new materials and the important roles they play in both encouraging and facilitating the very same technological breakthroughs that our society depends on [for more commodity futures news and analysis subscribe to our free newsletter].

For commodity investors, the development of advanced, or specialty, materials presents itself as the next frontier to conquer; with scientists and engineers working hard to develop everything from superinsulating aerogels to flexible concrete, it’s undeniable that the advanced materials corner within the commodity producers market offer lucrative opportunities to those with a stomach for risk and a long-term horizon [see also The Next Big Industry: Farming Technology].

Some might contend that their existing exposure to bellwethers like Alcoa, DuPont, and 3M favorably positions them to take advantage of growth in the advanced materials market over the coming years. While it’s true that many of these big names have been researching and developing new technologies for years, it’s important to keep in mind that they are far from “pure plays” when it comes to tapping into new materials markets. In other words, investors need to roll up their sleeves and do a little digging of their own in an effort to uncover the smaller, lesser-known, names that stand to offer more direct exposure to the advanced materials market.

Below, we highlight three stocks that have a foothold in the advanced materials market and warrant a closer look from anyone looking to diversify beyond the traditional, well-known commodity producers out there. Keep in mind that each of these stocks boasts its own set of risks and nuances, so be sure that you understand their operations as well as the fundamental factors that influence the materials markets that they operate in:

Allegheny Technologies (ATI)

This company operates as a diversified specialty metals producer. Allegheny’s product lineup includes titanium, superalloys, advanced powder alloys, and stainless and specialty steel alloys just to name a few. While the company does generate a major portion of revenues from its more traditional stainless-steel operations, its other products boast a growing presence in a number of markets, including: aerospace & defense, oil & gas, medical, construction, and even the automotive industry.

GrafTech International (GTI)

This company operates in two segments, including Industrial Materials, which is focused around graphite electrodes used in the production of steel and other smelting processes, and Engineered Solutions, which includes advanced electronics technologies as well as advanced composite materials. GrafTech’s product lineup includes natural as well as synthetic graphite and carbon-based materials that are used in, and provide services to, fuel cell power generation, electronics, semiconductors, transportation, and the chemical and petrochemical markets.

Esterline Technologies (ESL)

This company operates in three segments: Avionics & Controls, Sensors & Systems, and Advanced Materials. The company’s materials division focuses on thermally engineered components that can withstand extreme temperature, vibration, and chemical exposure. As you may have expected, the company serves as a supplier to commercial and military aircraft manufacturers. Esterline’s products also boast a presence in the automotive and energy sectors.

Don’t forget to subscribe to our free daily commodity investing newsletter and follow us on Twitter @CommodityHQ. Disclosure: No positions at time of writing

This entry was posted in Commodity Producers, Spotlight and tagged , . Bookmark the permalink.

Commodity HQ is not an investment advisor, and any content published by Commodity HQ does not constitute individual investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities or investment assets. Read the full disclaimer here.

3 Responses to “Advanced Materials: The Next Frontier for Commodity Investors”

  1. Capital Stars says:

    I have read a few of the articles on your website now, and I really like your style of blogging. I added it to my favorites blog site list and will be checking back soon. Please check out my site as well and let me know what you think.
    Free Nifty Futures Tips

  2. Capital Stars says:

    Great job here. I really enjoyed what you had to say. Keep going because you definitely bring a new voice to this subject. Not many people would say what youve said and still make it interesting. Well, at least Im interested. Cant wait to see more of this from you.
    Free Nifty Futures Tips

  3. Capital Stars says:

    mainly I read all blogs, it is my habit to collect information where ever I can, today I caught your nice blog and it is written to much owesome. Really I very appreciate it.
    commodity tips

Leave a Reply

  • Subscribe

    • RSS Icon   Twitter Icon
    • Sign up for free today:
  • Search