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CompanyMolycorp (NYSE: MCP)
Submitted by:cchigga
Member Rating:85.50
Submitted on:12/29/2010
Stock Price at Recommendation:$49.00
Molycorp Profile
Star Rating (out of 5)*
HeadquartersGreenwood Village, Colorado
Market Cap$4.3 billion
CompetitorsRare Element Resources (AMEX: REE)
Avalon Rare Metal (NYSE: AVL)
Taseko Mines (AMEX: TGB)

Sources: Capital IQ (a division of Standard & Poor's), Yahoo! Finance, and Motley Fool CAPS.

This Week's Pitch:

[Dear Molycorp],

Firstly the only ones touting you oh friendly stock are your underwriters who primarily have to gain from the fact that they have a vested interest. No wonder they're shouting $140 a share on PROJECTED prices and PROJECTED production.

1. Molycorp currently is not harvesting rare earth elements.
2. Molycorp will be harvesting rare earth elements in the most environmentally stringent state in the USA at the mountain pass mine which previously had to close because of environmental issues.
3. Their CEO said rare earth elements were a bubble until he realized that his stock was bubblin' up with them and then "changed" his mind about that statement
4. Delay in releasing earning numbers.
5. HUGE insider sells.
6. WTO saying that Chinese government restrictions on rare earth elements is illegal. This should play out to again increasing demand.
7. Only down 9% when the rest of the rare earth elements have been sitting on 20-30% losses.

The bottom IS going to fall out of this and I'm hoping its sooner rather than later. Goodbye Molycorp, it was fun, it was fun.

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Dan Dzombak did not have a position in any of the companies mentioned in this article. Pitches must be compelling, made in the past 30 days, and be at least 400 words. The Motley Fool has a disclosure policy.