Strategic Materials

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MP Materials - >>> 3 Unstoppable Growth Stocks to Buy in March


Motley Fool

By Daniel Foelber, Scott Levine, and Lee Samaha

Mar 5, 2022


https://www.fool.com/investing/2022/03/05/3-unstoppable-growth-stocks-to-buy-in-march/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

MP Materials is a domestic producer of rare-earth minerals, a critical component of electric vehicles.

This mining company is a rare find for growth investors


Scott Levine (MP Materials): With U.S. consumer interest in EVs racing higher recently, there have been numerous calls for America to shore up its supply of rare-earth minerals, which are important components of the vehicles and largely sourced from China. The U.S. Geological Survey, for example, estimates that the U.S. has about 1.8 million metric tons of rare-earth oxides while China has approximately 44 million metric tons, or 37% of global supply. In fact, two weeks ago, the Biden administration made clear the importance of firming up the nation's supply of these materials and announced partnerships with several companies to boost the domestic supply of these critical materials.

One such company identified in the announcement is MP Materials, which will receive $35 million in funding from the Department of Defense in pursuit of "establishing a full end-to-end domestic permanent magnet supply chain." According to the company, it's the only integrated rare earth mining and processing site in North America, making it a key player in the initiative to secure the nation's supply of these important materials.

Illustrating how the company is smack-dab in the middle of growth mode, MP Materials announced fourth-quarter 2021 results last week that featured its achievement of generating record revenue in 2021: $332 million, a year-over-year increase of 147%. Additionally, MP Materials reported fourth-quarter 2021 net income of $49 million, setting a quarterly record for net income.

It's not only in the financials where investors can see it growing, however. MP Materials reported a 28% increase in its estimated rare earth oxide reserves, adding 11 years to the estimated mine life of Mountain Pass, which is now expected to operate for another 35 years. Add to this the fact that the company recently signed a long-term supply agreement with General Motors -- a deal that can certainly be a harbinger for similar deals with EV-makers in the future -- and the attractiveness of MP Materials becomes all the more apparent.

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