MCP - Molycorp

[stahleyp]

This is rather interesting but also speculative one. The stock hit a new 52 week (and all time low) today. The company is one of the world's biggest miners of rare earth metals.  Make no mistake. This one has some hair on it.

 

The stock is trading around book value. They're cash flow negative...by a lot. They've been investigated by the SEC, the CEO resigned last year and they've issued a bunch of stock recently. There is also as huge short percentage here. If the economy is really turning around, rare earth metals would probably be something to consider since they're out of favor these days. Honestly, this one is out of my circle of competence. I was hoping one of the gold or mining guys on here might share some of his wisdom! 

[bz1516]

MCP is definitely not a long.  It could be a good short, but its a little conflicted for a great short because of its downstream Neo division and why short MCP anyway when you can short Lynas, a pure and stronger short.

 

Don't know how much color you want, but if you want more fire away.

[BG2008]

Molycorp's Happy Meal

 

http://online.wsj.com/news/articles/SB10001424127887323829104578622011650335422

 

 

[starmitt]

It's in my circle - wouldn't touch it. It is not a viable long term business.

 

As an aside, the profile of their rare earths is not very attractive. The ore is fairly high in concentration but low in the specific elements that are likely to drive big revenue increases in the event of an economic surge. Though under the old CEO they did make some claims (printed, not mining) that suggested otherwise.

[Laxputs]

http://www.marketfolly.com/2014/09/oaktree-capital-discloses-molycorp-stake.html