Commodities are a great way to further your portfolio’s diversification, and while commodity price movements are difficult to predict, I still think that some of the top miners in the space can add ample value to a portfolio that’s looking to balance risk and reward. Of course, when it comes to commodities, it’s mostly about energy (think oil and gas), and maybe precious metals (gold and silver, which have been cooling off after a red-hot multi-year run).
And while I think there’s no shortage of value with the Canadian energy and precious metals plays, I think that keeping tabs on rare Earth metals is also worth the while. Undoubtedly, with the AI revolution and EV (electric vehicle) boom kicking into high gear, demand for various rare earth metals could continue to be heated.
Of course, you’ll need to venture into the smaller-cap companies to gain such exposure on the TSX Index. Just like there are plenty of great, fast-moving precious metal miners in the depths of the TSX, there are also intriguing, up-and-coming rare earths plays that may very well be worth a closer look, especially as the secular tailwinds at the back of rare earths continue to stay relatively robust.
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Neo Performance Materials
Enter shares of Neo Performance Materials (TSX: NEO), a very intriguing $1.54 billion company that investors ought to take notice of after nearly doubling year-to-date (a 97.8% gain as of the time of this writing). Of course, it hasn’t been a smooth ride up, with three separate plunges into a bear market (that’s a 20% fall) experienced in 2026 thus far. But for those who held, it’s been a very quick V-shaped recovery to new highs.
More recently, the shares are coming back after the most recent 35% drop. And while the mid-cap isn’t going to be for everyone, I think that such a name (even in small doses for your portfolio) makes for some exciting spice on top of a portfolio that’s already diversified. Of course, one of the biggest rules for investors is to invest in what one knows. And when it comes to rare earths, it’s hard to know what exactly one is getting into.
From gallium to hafnium and everything in between, it’s easy to get quite overwhelmed by the kinds of elements a rare earth miner produces. In my view, it makes more sense to look at what’s being produced and the demand drivers (tech-driven trends) that could power the price trajectory behind such metals. Indeed, AI, renewables, electrification, robotics and more are themes poised to power demand for rare earths mined by firms like Neo.
Shares are expensive, but they deserve to be
Either way, the China-U.S. chatter has put rare earths in the spotlight. And, in my view, Neo is a great, albeit still somewhat expensive way to play the space. The firm is growing quite quickly for a miner, with earnings soaring, thanks in part to strength in hafnium and gallium prices.
Add the expansion potential and streamlining efforts into the equation, and I think that the premium might be more than warranted. While I’m skeptical as to whether shares can double again by the end of next year, I think that the firm’s position in the rare-earth magnet space is enviable as numerous tech-driven trends look to power serious demand for years to come.
In my view, portfolios are underexposed to the rare-earth space, and NEO stock stands out as a great way to punch a ticket at a somewhat more reasonable price than just a few months ago.
