The diamond market is being shaken up as lab-grown gems win over more customers and natural diamond prices come under pressure. Anglo American’s plan to sell De Beers, along with falling rough diamond prices and mine disruptions, underlines how serious this shift has become. For investors, that kind of disruption can either expose weaknesses or create new openings. This article looks at three stocks directly exposed to the latest news, including one that could stand to benefit from growing demand for lab-grown diamonds and two where the risks linked to natural diamond production are becoming harder to ignore.

Anglo American (LSE:AAL)

Overview: Anglo American is a London headquartered global mining company that produces copper, premium iron ore, diamonds, manganese and crop nutrients across multiple regions.

Operations: Anglo American generates most of its revenue from Copper at about US$9.4b and Premium Iron Ore at about US$6.7b, with De Beers contributing around US$3.1b and smaller contributions from manganese, crop nutrients and other activities.

Market Cap: £39.7b

Investors should look at Anglo American with caution. The core of the story is a switch toward copper and premium iron ore. The De Beers division drags on results with a reported EBITDA loss of about US$0.5b and a US$2.3b impairment as the lab grown diamond trend bites. Management is reshaping the portfolio and targeting cost cuts. However, the group is still loss making, has funding that relies on higher risk external borrowing and faces execution risk on multiple mine plans and asset sales. Analysts expect strong earnings growth, but that view assumes profitable exits, smooth project delivery and a cleaner balance sheet that are not yet in place.

Anglo American’s pivot away from diamonds is only half the story. The real question is whether its balance sheet and funding can handle more bumps. Get the fuller picture with the Anglo American financial health report

Signet Jewelers (SIG)

Overview: Signet Jewelers is a large diamond jewelry retailer that sells engagement rings, fashion jewelry and related services through brands such as Kay, Zales, Jared and H.Samuel across North America and the UK, supported by growing online platforms like James Allen and Blue Nile.

Operations: Signet generates most of its revenue from its North America Segment at about US$6.4b, with the International Segment contributing roughly US$417.8m and the Other Segment about US$31.7m.

Market Cap: US$3.7b

Signet Jewelers sits in the middle of the lab grown diamond shift that is pressuring miners but helping retailers that can manage pricing and sourcing. Management reports that lab grown diamonds are supporting higher average transaction values while production costs have fallen, which can support margins even as prices on natural stones face discounting and heavy competition from independents. The company is also leaning into services, digital sales and buybacks, which together can support earnings quality and per share metrics. On the risk side, unit volumes in some categories are under pressure, tariffs and gold prices can squeeze profits, and the dividend record is uneven. For investors, the key question is whether the current mix of value, growth and risk stacks up in Signet’s favor.

Signet Jewelers sits at the crossroads of lab grown diamond momentum and tight cost control, and the real story is found in the detailed earnings drivers inside the analysis report for Signet Jewelers

Petra Diamonds (LSE:PDL)

Overview: Petra Diamonds is a London based miner that extracts, processes and sells rough natural diamonds from its core operations in South Africa and Tanzania, anchored by the historic Cullinan mine.

Operations: Petra Diamonds generates its revenue from South Africa mining activities, with about US$128m from the Cullinan mine and about US$64m from Finsch.

Market Cap: £22.1m

Petra Diamonds sits directly in the path of the lab grown diamond shift. It focuses on higher value, coarser stones from Cullinan and Finsch and is working to improve grades, product mix and cost control. However, industry wide rough diamond prices remain under pressure, and recent tenders still showed like for like price weakness. The balance sheet is fragile, with negative equity, high reliance on external borrowing and limited cash. As a result, any further hit to prices or production could quickly tighten liquidity. Management is trying to reshape the business around a leaner two mine model and better quality output. Investors may wish to weigh that plan against the risk that structural demand changes for natural diamonds could continue to squeeze margins and leave little room for error.

Petra Diamonds’ fragile balance sheet and pressured rough prices may be masking deeper stress that current headlines do not fully capture. Get the full risk picture in the Petra Diamonds financial health report

Take Control of Your Investment Journey

If Anglo American or any of these companies have caught your attention, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value and track any new developments as they happen. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Alternatives Before Everyone Else?

Fresh stock ideas can move from quiet accumulation to full breakout fast. Spot momentum while it matters, before the crowd reacts and ideal entries get caught. Act now.

• Target resilient income streams as rates shift by scanning companies in the 4 dividend fortresses that focus on durable payouts backed by solid business models.
• Hunt for under the radar quality by checking the curated 10 high quality undiscovered gems that filters for strong balance sheets, real cash generation and disciplined capital allocation.
• Position ahead of infrastructure momentum by reviewing the focused 36 power grid technology and infrastructure stocks highlighting companies tied to grid upgrades, reliability projects and long term electrification trends.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.