Rare earths are like the new gold, and the companies that mine it have plenty of growth ahead. The best rare earth stocks are already growing.
Rare earths are not a topic that comes up in everyday conversation. But rare earths are a big part of our everyday lives in today’s world. And lately, the best rare earth stocks have benefitted greatly from our dependence on these minerals.
There are 17 rare earth elements, and very few of them are high enough on the periodic table for you to remember them from your eighth-grade science class. Obscure elements like Neodymium (Nd), Dysprosium (Dy) and Promethium (Pm) all qualify as rare earths. But the products they’re used in these days are household names: Apple iPhones, Tesla’s electric cars, General Electric’s wind turbines, F-35 fighter jets, etc.
Rare earths are big business, with a client list that includes Silicon Valley, healthcare innovators, the Department of Defense and the surging alternative energy industry. Trillions of dollars are spent on rare earths each year. So it’s no surprise many rare earth stocks have been on a tear of late. Despite those big run-ups, given the trajectory of the industries they serve, it’s likely rare earth miners and suppliers are still in the very early stages of their growth.
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It’s why the largest pure rare-earth play is a mid-cap stock, with a market capitalization of a mere $5 billion. That stock is one several rare earth stocks that have doubled in the past year.
Here are three that have and look poised for bigger gains in the years ahead.
The 3 Best Rare Earth Stocks
Best Rare Earth Stock #1: MP Materials (MP)
This is the largest publicly traded rare earth materials company. Headquartered in Las Vegas and majority-owned by several large hedge funds, MP Materials mines in a place called Mountain Pass, one of the richest rare earth deposit sites in the world, with 800,000 tons of recoverable rare earth oxides. Though revenues are just getting started (only $227 million expected this year) and profits are at least a year away, the company produces 15% of the global supply of rare earths in the form of rare earth concentrate. That kind of promise has investors sold: MP came public last June, and is up 214% since despite some recent weakness.
Still above its (recently formed) 200-day moving average, MP looks buyable right here as perhaps the most reliable long-term play on the global rare earths boom.
Best Rare Earth Stock #2: Lynas Rare Earths Limited (LYSCF)
Lynas is an Australian rare-earths mid-cap miner that trades over the counter in the U.S. under the ticker symbol LYSCF. It’s up a whopping 275% in the last year.
Why? It’s done $336 million in sales in the last 12 months, nearly double MP Materials’ expected revenues for full-year 2021, and actually managed to turn a small profit in the last year, a rarity in this neophyte industry. And it has a 14% share of the world’s rare earths market, just behind MP Materials. With a processing facility in Malaysia and another one coming in Texas, Lynas is establishing a global footprint.
Best Rare Earth Stock #3: Medallion Resources Ltd. (MLLOF)
This one’s far more speculative, with a market cap of a mere $18 million and a share price just shy of 30 cents. But, MLLOF is up more than 500% in the last year, and Medallion Resources is a Canadian company that is part of what could be the first North American supply chain for rare earths. Medallion would source and process monazite from Florida and Georgia into rare earth concentrate.
Bottom Line on Rare Earths
The rare earths industry is still in its infancy. And because more than 85% of the world’s rare earth supply comes from China, it’s even more of an unknown here in the States. That will soon change, as more Mountain Pass-type mines spring up and as the opportunity becomes more apparent to institutional investors. The time to invest in rare earth stocks is now, before Wall Street notices and drive share price much higher in the years to come.
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