Alto Capital research analyst Carey Smith told the Australian Nickel Conference in Perth that the market was getting a bad rap.
Punters had been paying attention to the fall in nickel prices, while net losses reported by some nickel producers were not helping.
While the market appeared to be struggling, Smith said you only had to look at four ASX-listed mid-cap nickel companies to realise the industry was still going strong.
Smith listed Independence Group, Panoramic Resources, Western Areas and Mincor Resources as companies with robust balance sheets.
"Three out of four of them have substantial net cash levels with hardly any debt," Smith said.
"They also have some great flexibility in these times when it's a bit tougher.
"They can ride these difficult times out while other companies can go bust."
Independence Group, which operates the Long underground mine in Western Australia, had $A192 million in cash at the end of June 30, while Western Areas had $165 million in cash reserves.
While Panoramic reported a net loss after tax of $18.2 million for the 2012 financial year, its cash and receivables position was strong at $79 million.
Meanwhile, Mincor had a solid 2012FY, with earnings before interest, tax, depreciation and amortisation almost doubling to $32.4 million.
The company closed the financial year with $76 million cash on hand.
Along with good operating cash costs that are under the current nickel price, Smith said the strong management teams of the four companies made them stand out.
"The management of all four of these companies is world class," he said.
"Most companies would kill to have their management."
More importantly, Smith said the companies understood the importance of financial discipline, which was crucial in these times of falling prices and reduced demand.
Looking to what nickel would do in the long-term, Smith predicted some tough times ahead before things patter out in 2014.
"Unfortunately that means we got another two years where it's going to be a little bit tougher, but our mid-cap companies can certainly ride that out with their substantial cash balances and low operating costs," he said.
Smith forecasts the average nickel price for the 2013 calendar year to hover around $18,500.