Build American

That’s the mantra of the incoming Trump administration. And it’s a good one.

During the pandemic shutdowns that crippled the global supply chain, America became painfully aware of how dependent it is on foreign made products and raw materials. That’s especially critical when it comes to things like national security.

Recently we posted an article that discussed Donald Trump’s pledge to rebuild our military. It’s a broad, sweeping promise. But when you break down the details of achieving that bigger goal, you see a lot of smaller goals on which it depends. Like sourcing the materials necessary to rebuild our military technology.

Rare earth elements are one of the critical pieces of that bigger puzzle. And sourcing them from domestic supplies is critical as well. For investors looking to capitalize on that opportunity, you may look no further than MP Materials Corp. (MP)

MP Materials Corp. (MP)

MP is an NYSE traded company that specializes in mining and processing rare earth elements.

Founded in 2017, the company is based in Las Vegas, NV and sports a market cap right around $3.3 billion.

It owns and operates the Mountain Pass Rare Earth mine and processing facility. It holds the mineral rights to the Mountain Pass mine and surrounding areas, as well as intellectual property rights related to the processing and development of rare earth minerals.

According to them:

“Today, MP Materials produces about 15% of the rare earth content consumed annually.”

As of December 21, 2023, its balance sheet is respectable with cash and current assets at just over $1 billion while short term debt is just over $108 million. Their total assets come to nearly $2.8 billion while total liabilities are just over $1 billion.

Its short term assets barely cover their long term debt.

The company has seen a negative revenue trend over the past two calendar years and over the trailing 12 months it posted a loss of nearly $38 million. Part of that may be as a result of it taking on the majority of its long term debt over the past 12 months. Prior to this period, the company had been profitable.

Many analysts agree, however, the company’s outlook is for serious growth potential.

Additionally the stock has been rallying for the past three months and has convincingly taken out a major downtrend line.

MP Materials (MP)

Source: Barchart.com

So while its balance sheet may be soft at the moment, its growth potential is significant. Recent price gains may make it a bit rich at this point so a little consolidation may be possible.

But as rare earths go, MP could be a company to watch…