The best diamond stocks will depend on your investment objectives and portfolio. However, companies with high volatility may be suitable for day traders; long-term investors should search for stocks with more consistent returns over the long run.
Additionally, think about which stocks are simple to purchase. Because many diamond stocks are traded on non-US markets, traders will need a brokerage account with access to foreign stocks. Suppose they are interested in a particular stock listed on a non-US market. In that case, people should see if it is accessible through their brokerage account, as different brokerages provide access to other exchanges.
Table of Contents
Understanding Diamonds
Buy stocks in the wind energy industry immediately with a market order, or wait for the stock to reach a specific price with a limit order. Diamond nearly never changes to graphite, a different solid form of carbon chemically stable at ambient temperature and pressure. Diamond is the most complex and thermally conductive natural substance, and these qualities are used in many critical industrial applications, including cutting and polishing equipment. They also allow materials to be subjected to pressures observed at great depths on the Earth in diamond anvil cells.
Few forms of impurities may contaminate diamonds because of how rigidly the atoms are arranged in them (two exceptions being boron and nitrogen). About one impurity or flaw in a million lattice atoms gives the diamond its many colors, including blue (from boron), yellow (from nitrogen), brown (from defects), green (from radiation exposure), purple, pink, orange, or red. Optical dispersion is also relatively high in diamonds (ability to disperse light of different colors).
A billion to 3.5 billion years ago is when most natural diamonds were formed. A handful has emerged from as deep as 800 kilometers, although most developed between 150 and 250 kilometers (93 and 155 mi) in the Earth’s mantle (500 mi). Diamonds were created when carbon-containing fluids dissolved different minerals at high pressure and temperature. They were deposited in igneous rocks called kimberlites and lamproites and only recently transported to the surface (tens to hundreds of millions of years ago) by volcanic eruptions.
Synthetic diamonds can be created through chemical vapor deposition from hydrocarbon gas or high-purity carbon under extreme pressure and temperature conditions (CVD). Silicon carbide and cubic zirconia are two more substances that may be used to create imitation diamonds. Optical methods and thermal conductivity tests are the most popular methods for differentiating natural, fake, and synthetic diamonds.
An Overview of Diamond Stocks
One of the biggest markets for diamonds worldwide is the United States. In 2019, it spent $20.2 billion, or 19.2% of the world market, on diamonds. Rough diamonds are employed in industrial applications in around 46% of cases and gem-quality polished mineral stones in 19% of cases.
As 2019 concluded, diamond stock values were at their lowest, with some plummeting as low as $5. Things for the diamond sector appeared to be getting worse in 2020. The epidemic impacted the Chinese diamond market, accounting for 15% of the world’s demand. The market demand for diamonds may continue to suffer due to the pandemic’s aftershocks.
The future is anticipated to be favorable for diamond stocks. Please take advantage of our best recommendations for diamond stock and suggest online brokers enter the market from the beginning.
How to Choose a Diamond Stock
Due to a lack of pricing transparency, the diamond stock has been overlooked. However, it is once more seen as a risky but profitable investment. Between the exploratory and commercial production phases, much time has passed, and shares of diamond stock may change during this lag time. However, businesses that uncover a lot of mineable diamonds can reap significant financial rewards.
When investing in diamond stocks, it is critical to discover how to reduce your risk. Look for diamond stocks with substantial deposits of excellent quality, proven mines, and profit potential.
When searching for the top diamond stocks, keep the following things in mind:
- Earnings per share (EPS) is determined by dividing a company’s earnings by the number of shares of common stock still outstanding. The EPS reveals a company’s profitability, and profitability is increased when the EPS is higher, and businesses report EPS after accounting for unusual phrases.
- The time series length reveals how long a firm has been listed on the exchange. Credibility is increased with a more incredible experience.
- The capacity to purchase or sell an asset without impacting the stock price is known as liquidity. Look at the equity’s average transaction volume. The equities should have an average transaction volume of at least 100,000.
Top 10 Diamond Stocks in 2022
1. LVMH Moet Hennessy Louis Vuitton
Moet Hennessy LVMH The most fabulous luxury company in the world, Louis Vuitton is the owner of various prestigious brands that evoke the spirit of high fashion. Additionally, it plays a significant role in producing and selling diamonds and jewelry. The company’s portfolio of brands includes well-known names Bulgari, Chaumet, and TAG Heuer.
LVMH finalized the acquisition of Tiffany early in 2021 to strengthen its position in premium jewelry and gemstones. In order to promote good change in the industry, LVMH soon after announced the start of a collaborative gemstone and raw materials sustainability program.
LVMH is not only an investment in diamonds. LVMH stock exposes investors to luxury clothes and accessories, fragrances and cosmetics, champagne, wine, and spirits, and its companies that specialize in jewels. However, if you are looking for a “house of fashion” stock that also owns some of the best diamond companies in the world, LVMH Moet Hennessy Louis Vuitton would be a good place to start.
2. Anglo American
Another well-known mining stock is Anglo American, located in the UK, and has operations worldwide that produce platinum, copper, nickel, iron ore, and diamonds. Although the majority of Anglo American’s sales are made up of metals and ore, this is the best way to trade in the diamond market. The Republic of Botswana holds 15% of diamond producer De Beers Group, of which Anglo American controls 85%. De Beers Group is the firm behind the catchphrase “A diamond is forever.”
De Beers and its partners generate around one-third of the rough diamonds available worldwide. De Beers also has retail assets offering completed goods to customers and cutting and polishing diamonds. Investors interested in producing income should give this mining and diamond investment, together with Anglo American’s base metal output, a rugged look because it pays shareholders a semi-annual dividend.
3. SF Diamond (300179)
Polycrystalline diamond (PCD) and composite super hard materials are produced and sold in China by SF Diamond Co., Ltd. After closing the previous day at $15.76; the SF Diamond stock began the next one at $15.76. The most recent cost was 18.10 (25-minute delay). With a trailing 12-month sales of around CNY451.6 million and 554 employees, SF Diamond is a publicly traded company on the SHE. Every pricing is displayed in Renminbi.
4. Signet Jewelers
One of the biggest retailers of gemstone jewelry is Signet Jewelers. Some of its subsidiaries are Kay, Zales, Jared, and other brands. The business features 2,800 retail locations, most of which are in the United States. Following the COVID-19 epidemic, the demand for jewelry increased dramatically, positively impacting Signet’s revenues and stock price.
Nevertheless, because the internet is altering consumer behavior, Signet has undertaken several acquisitions to ensure it is still relevant in the internet age. To strengthen its online presence, it bought R2Net (the parent company of JamesAllen.com) in 2017, and in 2021, it bought the tiny destination jeweler Diamonds Direct and the diamond rental start-up Rocksbox. There is no telling how long the recent boom in gemstone sales will last, but Signet Jewelers should be on your list of stores to check out.
Despite not having the fastest development, diamonds and jewelry still hold a particular place in people’s hearts worldwide. Although investment in this sector is unlikely to result in hypergrowth, there are reputable companies that produce diamond jewelry and accessories that are worth investors’ attention.
5. Lucapa Diamond Company
One of the top ASX-listed diamond stocks is Lucapa Diamond Company (LOM), a producer of diamonds with an emphasis on Africa. Lulo in Angola and Mothae in Lesotho are the two high-production mines owned by the firm. In order to identify the primary kimberlite source of the alluvial production at Lulo, Lucapa is launching an exploration campaign.
The business found several huge diamonds weighing more than 100 carats, including a mammoth 215 carat stone in February of this year. A record 25,844 carats were sold at an average price of US$2,857 per carat, setting a new yearly record for sales at the Lulo mine as of December 1.
The 4.4 million carat JORC compliant resource at the historic Merlin diamond property in Australia’s Northern Territory was acquired by Lucapa in December. Within the following two years, the business wants to restart operations at the mine.
6. Rio Tinto
Rio Tinto, situated in the UK, is one of the biggest manufacturers of raw materials worldwide. The enormous mining company mines the soil for various materials, including copper, aluminum, and iron ore. Rio Tinto is one of the biggest producers of diamonds in the world thanks to its operations that span the globe and include a few top-yielding mines for the gemstone.
The primary source of revenue for Rio Tinto is industrial metals, which are increasingly used in the economy’s manufacturing, technology, and other sectors. Rio Tinto’s product demand is cyclical, as is the case for many mining and raw material industries. Rio Tinto is one of the world’s biggest mining companies and the most reliable metals producers, making it the perfect choice for investors seeking secondary exposure to the diamond sector.
7. Gem Diamonds (GMDMF)
A business established in the UK that explores and develops diamond mines is called Gem Diamonds Ltd. Lesotho (diamond mining activities), Belgium (diamond sales, marketing, and manufacturing), the BVI, RSA, the UK, and Cyprus are among the geographical sectors of the corporation (technical and administrative services). The region of Belgium is where it earns the most money, and Letseng Diamond Mine and Ghaghoo Diamond Mine are two of its initiatives.
8. Star Diamond
The Star-Orion South diamond project is part of the Fort à la Corne mineral dispositions, which are entirely held by Star Diamond (DIAM). The mineral dispositions at Fort à la Corne are situated in the same-named provincial forest in Central Saskatchewan, Canada.
The miner claims that from the early discovery of these kimberlites in the late 1980s, the enormous extent and immense kimberlite volume contained in the Fort à la Corne field have been recognized.
The Star and Orion South kimberlites might yield 66 million carats in a surface mine during 38-year project life, according to a preliminary economic evaluation from 2018.
9. Zhengzhou Sino Crystal Diamond (300064)
Synthetic diamonds and related goods are researched, developed, produced, and sold in China by Zhengzhou Sino-Crystal Diamond Co., Ltd. After closing the previous day at $1.27, Zhengzhou Sino Crystal Diamond shares began the day at $1.50. 1.50 was the most recent price (25-minute delay). With 1,082 employees and a trailing 12-month sales of about CNY£877.7 million, Zhengzhou Sino Crystal Diamond is a publicly traded company on the SHE. Every pricing is displayed in Renminbi.
10. Mountain Province Diamond (PVDF)
A Canadian diamond business is called Mountain Province Diamond. The business combines the sourcing, mining, and selling natural rough diamonds from Canada’s Northwest Territories.
The market value of the diamond stock is $56 million. Each day, more than 16,000 shares are traded. In 2019, Mountain Province Diamond brought in $276 million.
Should You Invest In Diamond Stocks?
It is dangerous to invest in diamond stocks. Between the exploratory stage and commercial production, there is a considerable distance to travel when they start generating money by producing diamonds for sale. Additionally, there is sometimes a significant delay between announcements of development on a mine, and during this period, share values may decline.
On the other hand, Canadian diamond stocks that discover mineable quantities of diamonds may be pretty profitable. For instance, the $700 million Ekati mine, which began operations in 1998 and generates over $500 million in income annually, is anticipated to last for more than 20 years.
Concentrating your diamond stocks investments with profitable, established mines and high-quality deposits may reduce your risk in the volatile resource industry. As for resource stocks should only make up a small amount of your portfolio—less than 20% for a conservative investor and up to 30% for an aggressive player, including oil and gas stocks.
While we believe you should keep a certain amount of exposure to resource companies, you should nevertheless strive for balance across the majority, if not all, of our five key economic sectors: resources and commodities, finance, manufacturing and industry, utilities, and the consumer sector. No matter how tempting they seem, it would be best if you never resisted the urge to buy many mining stocks. These equities could suffer larger than average losses if the market does experience a downturn.
How to Buy Diamond Stocks
- To invest in one or more of these diamond stocks, create an account with an online broker or platform.
- Contrasting stock trading platforms By fees and bonuses, utilize our comparison table to select the top brokers.
- Create and add money to the brokerage account. You will require financial and personal information, including your contact and banking data.
- Look up the stock you want to invest in. Look up the stock using its name or tickers, such as ALRS or RIO.
- Choose how many to purchase. While some brokers enable you to buy fractional shares, others only let you buy complete ones.
- Pick a style of order. You can buy diamond stocks immediately with a market order or wait until your desired price is reached with a limit order.
- Acquire the shares. The Buy button on your brokerage account may be tapped or clicked. Once you have invested in the precious gem sector, monitor the performance of your stock to determine when it is time to exit.
Final Thoughts
While investing in diamond stocks has the potential to be profitable, bear in mind that, like other investments, diamond stocks are not without risk. These stocks are prone to changing market and precious gem industry conditions, so thoroughly research your choices before you buy. Whether you are a novice investor or have not looked at your investment accounts in a while, iscomparing brokers is a good idea to ensure you get the best features in your trading account.
