Electronics Recyclers: The Gold Mining Stocks You’ve Never Heard Of
Precious metals are having a great year. Gold and silver are beating the S&P handily. And gold mining stocks are as bullish as ever.
We’ve written plenty about big-name gold miners like Randgold. You know, the companies that actually pull gold out of the ground.
But there’s another major source of rare metals that most investors don’t know about…
That smartphone you dropped in the toilet last month.
Electronics recycling is a surprisingly cost-effective way to “mine” precious metals. According to the EPA, the recycling of one million smartphones can recover about 50 pounds of gold, 550 pounds of silver and 20 pounds of palladium.
If one million smartphones sounds like a big number, remember…
There are more than 327 million smartphones being used in the United States alone. That’s a lot of precious metal waiting to get fished out of the trash.
Below, we’ll look at three successful e-waste “gold miners.” These companies are shredding and smelting our broken devices into valuable commodities.
Alcoa (NYSE: AA) was founded more than 120 years ago as the Aluminum Company of America. Since then, it has become a global leader in metal recovery.
Metal foundries aren’t usually considered a “green” industry. But Alcoa’s investments in recycling have made it an exception. It bought Electronic Recyclers International in 2011, officially making it the nation’s largest e-waste recycler.
Its own wholesale metal products contain at least 25% recycled metals. And clearly, customers are pleased. For the last three quarters, Alcoa has reported earnings at least 33% above Wall Street expectations.
Appliance Recycling Centers of America
ARCA (Nasdaq: ARCI) is small, but its prominence in the electronics recycling industry can’t be ignored. It has been in the metals recovery business for more than 40 years and operates in two countries.
It has grown through a network of partnerships with environmental organizations and electronics retailers. These include Energy Star and ApplianceSmart.
This strategy has helped deliver ARCA shareholders more than 20% gains over the last six months.
You probably know Waste Management (NYSE: WM) as the company that maintains your neighborhood dumpster. But as its name implies, it handles all sorts of refuse services.
Its electronics recycling operation is one of the biggest around. Waste Management operates e-waste drop-off locations around the country. It even pays consumers to hand over their broken electronics.
As you can see in the chart above, Waste Management shareholders are having a great year. But the stock recently sold off, creating a potential entry point for new investors.
You can think of e-cyclers as the most lucrative “gold mining stocks” no one’s ever heard of. Owning these companies can allow you to profit from the precious commodities sitting right in your front pocket.
*The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of Wall Street analysts.