MP Materials: Flawless Execution And A Bright Future

Jan. 05, 2023 7:44 PM ETMP Materials Corp. (MP)12 Comments
UFD Capital profile picture
UFD Capital
479 Followers

Summary

  • MP Materials owns and operates Mountain Pass, the only integrated rare earth mining and processing site in North America.
  • They will be able to significantly grow their business and expand operating margins by executing their vertical integration plans.
  • Current and future supply agreements and government support significantly reduce the business risk traditionally associated with commodity companies.
  • We believe that the rewards outweigh the risks, and MP Materials is a buy at these levels.

Workers talking by machinery in quarry

Martin Barraud

Investment Thesis

After falling 46.54% over the past year, MP Materials (NYSE:MP) is undervalued. By becoming vertically integrated they will be able to better serve their customers and improve operating margins. In addition, current and future supply agreements and government

Balance sheet from MP Materials Q3 Earnings Report

Balance sheet from MP Materials Q3 Earnings Report (MP Materials Q3 Earnings Report)

Debt Obligations of MP Materials Q3 Earnings Report

Debt Obligations of MP Materials Q3 Earnings Report (MP Materials Q3 Earnings Report)

Slide from MP Materials Q3 Earnings Presentation

MP Materials Q3 Earnings Presentation

Slide from MP Materials Q3 Earnings Presentation

MP Materials Q3 Earnings Presentation

Chart
Data by YCharts

Chart of S&P 500 Sectors & Industries Forward P/Es / December 28, 2022 created by Yardeni Research

S&P 500 Sectors & Industries Forward P/Es / December 28, 2022 (Yardeni Research)

MP Materials Q3 2022 Earnings 10-Q

MP Materials Q3 2022 Earnings 10-Q

MP Materials Q3 2022 Earnings 10-Q

MP Materials Q3 2022 Earnings 10-Q

This article was written by

UFD Capital profile picture
479 Followers
UFD Capital, LLC is an investment advisory firm providing advice solely to institutional clients, with a focus on value oriented strategies. UFD Capital, LLC is the general partner and investment manager of UFD Capital Value Fund, LP.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of MP either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

UFD Capital Value Fund, LP owns shares in MP Materials Corp.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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