Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of rare-earth materials extractor Molycorp
So what: The price drivers today are plentiful: Financial Times reports that rare earth materials are being stockpiled in China, Piper Jaffray upgraded Molycorp to a buy, and a host of analysts piled on with positive assessments of the rare earth industry in general. Not surprisingly, rivals Avalon Rare Metals
Now what: OK, so Molycorp and friends have all fallen drastically from 52-week highs set in early May -- that perceived value is indeed one of the factors inspiring Piper to recommend the stock today. But you're still looking at a development-stage company with minuscule sales and no profits, working in an ill-understood market with most of the business happening half a world away at the whims of an artful Chinese administration. And for this, you're paying 70 times trailing sales.
Interested in more info on Molycorp? Add it to your watchlist.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool is investors writing for investors.