Skyrocketing greater than 275% because the begin of the 12 months (as of this writing), shares of MP Supplies (MP 4.78%) have benefited from robust investor curiosity in uncommon earth metals and magnets.
However might the inventory proceed its distinctive efficiency all through the rest of the 12 months and past? Let’s have a look at how two Idiot.com contributors deal with this query.
Picture supply: Getty Photos.
It is likely to be time to take some earnings with this high-flying inventory
Lee Samaha: Shares in MP Supplies have had an incredible run in 2025, buying and selling up greater than 270% 12 months thus far on the time of this writing. The unbelievable improve is because of a elementary reframing of the corporate’s development prospects in mild of the Trump administration’s willpower to make sure a home provide of uncommon earth supplies and magnets.
It has culminated in a 10-year deal with the Division of Protection (DOD), defined intimately right here. As well as, the corporate has signed an settlement with Apple that traders can sit up for.
Nonetheless, as ever in investing, the query stays: With these occasions considerably priced in, what occurs subsequent? The bulls will argue that extra offers will probably be forthcoming now that the DOD’s dedication has derisked MP Supplies’ deliberate funding within the magnetic manufacturing facility (referred to as the 10X Facility) and the growth of its uncommon earth functionality. They might be proper.
Nevertheless, the flip facet is that MP Supplies now must execute on developing services, which suggests incurring execution threat and securing $1 billion in financing from JPMorgan and Goldman Sachs earlier than the 10X Facility begins commissioning in 2028.
As such, it would make sense to, as a minimum, e book some earnings right here. Many of the excellent news could already be priced within the inventory, there’s execution threat and the potential of dilution (the DOD might personal 15% of the corporate as a part of the deal), and there isn’t any assure that new sources of uncommon earth supplies will not come to the market within the meantime.
These blockbuster offers could also be harbingers of what is to return
Scott Levine: You do not have to scour Warren Buffett’s annual letters to shareholders to realize investing insights (though it is not a nasty concept). There are some frequent nuggets of knowledge that traders will hear from numerous sources, one of the vital frequent being that it is not possible to time the market. And this outdated adage is very relevant to MP Supplies proper now.
With the inventory’s current meteoric rise, it is affordable to take a position that shares will stage off sooner or later and possibly even pull again some. The precise timing of when this can occur, in fact, stays unknown. For present shareholders, the higher plan of action is to sit down pat — possibly add to your place if there is a pullback. These wanting to provoke a place ought to acknowledge that there is the potential that the inventory will rise significantly larger after which commerce slightly decrease solely to rise once more, leaving them with worth factors larger than the place the inventory is buying and selling now.
Whereas the Division of Protection deal has quite a few advantages for MP Supplies, the partnership with Apple is very essential as a result of it demonstrates the urgent want for uncommon earths, that are important within the manufacturing of every part from shopper electronics to healthcare applied sciences to aerospace and protection purposes.
Corporations concerned within the manufacturing of those merchandise, furthermore, will need to shore up their provides of uncommon earths and the magnets made with them. As the one totally built-in uncommon earth supplies producer within the U.S. — and shortly producer of uncommon earth magnets — MP Supplies has a major aggressive benefit over the restricted variety of U.S. uncommon earth producers.
Is now a great time to purchase MP Supplies?
Legitimate arguments might be made on either side of the coin with respect as to if MP Supplies is a purchase now. For many who have benefited from the inventory’s fast rise over the previous few months, trimming their positions and reallocating the capital could also be a sensible transfer. Then again, the inventory has great potential to rise larger sooner or later, and attempting to time the inventory’s future dip could also be a foolhardy train. Traders ought to carefully look at threat tolerances and resolve if they’ll stand up to future volatility earlier than selecting up shares now.
Lee Samaha has no place in any of the shares talked about. Scott Levine has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Apple. The Motley Idiot recommends MP Supplies. The Motley Idiot has a disclosure coverage.
