What happened
Extending their 5% rise in October, shares of MP Materials (MP -0.76%), a mining company focused on the production of rare earth metals, shot 30% higher in November, according to data from S&P Global Market Intelligence.
In addition to some positive coverage on the stock from Wall Street, investors chose to click the buy button last month in response to the company's strong third-quarter earnings report.
Image source: Getty Images.
So what
Beginning the month on an auspicious note, MP Materials reported Q3 earnings on Nov. 4. It wasn't only the fact that the company beat analysts' revenue and earnings expectations that accounted for its impressive performance. MP Materials reported notable year-over-year gains in revenue and net income of 143% and 192%, respectively.
Besides the financials, it was management's tantalizing clues about a future announcement that encouraged investors to bid the stock up higher. On the conference call addressing the earnings report, management fielded an analyst's question regarding the company's prospects in building a facility or pursuing a joint venture. While the company didn't answer the question directly, it did provide a tantalizing clue that something was on the horizon, and that the company would make an announcement before the end of the year.
Here's what CEO James Litinsky said on the earnings call:
The fact that we're announcing before year-end means we're building something. And so there's at least that Easter egg, so to speak. But ... we are building something."
The recognition that bullish sentiment is building on Wall Street motivated investors throughout the month to pick up shares. On Nov. 11, for example, Laurence Alexander, an analyst at Jefferies, initiated coverage on the stock with a buy rating and a $55 price target, according to Thefly.com. Two weeks later, Lawson Winder, an analyst at Bank of America, rated the stock a buy and set a $52 price target.
Now what
With enthusiasm for electric vehicles (EVs) continuing to race higher, it's unsurprising that MP Materials is gaining notice from EV-focused investors as well as those on Wall Street. Oh, and that big announcement that management teased on the conference call? It may still be coming, or it may be the news that the company reported today regarding a long-term supply agreement that it recently inked with General Motors.
In any case, MP Materials certainly warrants attention from both EV-minded investors as well as those compelled by the company's commitment to shoring up the United States' supply of rare earth metals.
