Jim Lebenthal MP Materials MP-N BUY Jun 16, 2025

It went down because Tesla said it would buy fewer rare materials. But he feels that's unlikely, because Tesla needs them. A buy.

A long-term stock. Earnings yesterday stated that they are refining their own rare earths themselves and not sending them to China. A big move. They hold a lot of cash too.

It's getting into battery production itself, not just supplying the rare earths for it. They're positioned well. They plan to boost capacity by 50% over 4 years. A good alternative to Chinese suppliers.

Certainly the company has a scarcity value, and recent news (The Pentagon investment and AAPL's contract) are extremely positive overall. There is a FOMO trade happening here, but it is important to note that the company has lost money in the past two years, with 35c in EPS expected next year. This makes it 'not cheap' certainly at 171X earnings. EPS could accelerate, though, and in a positive market investors are caring less on valuations. But we think we would side with caution for the moment. The likelihood of another big deal in the short term we think is low, and we think this excitement will fade, at least a bit, and we would prefer to let the stock consolidate recent gains. It still has a 23% short interest and part of the recent gains are clearly from panicked short sellers covering, and this made fade. 
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