MP - Is MP Materials a Good Stock to Buy in 2022?
With cash losing value, should you turn to commodities? In this clip from "The 5" on Motley Fool Live , recorded on Jan. 18 , Motley Fool contributor Taylor Carmichael discusses why MP Materials (NYSE: MP) is one stock worth keeping an eye on in an inflationary environment.
Taylor Carmichael: This is a stock I don't own but is really interesting. I've been keeping it on a watch list for a while. It's called MP Materials. This is a mining company that they mine rare-earth metals. What makes it really interesting to me is that these are critical for so many technological revolutionary things. These particular metals are why we have smartphones, why we have electric cars. It's the magnets that are used in wind turbines, in robots, in drones. This is a really critical metal. Aside from this company, MP Materials, the only rare-earth materials that are available are in China. China, of course, is an autocratic dictatorship. In my opinion, that government is really untrustworthy. It's an interesting way, in an inflationary environment, basically you want to be in anything that's not cash. So you want to be in commodities, you want be in stocks, because cash is just losing value. Historically, commodities do well in an inflationary environment. Oil companies do well in an inflationary environment. Miners do well. I'm not a fan of mining stocks in general and it's not something that I've ever actually invested in. But these guys are hugely successful. I've got a few numbers here: 40% profit margins, 143% revenue growth. It's still a relatively small cap. I think it's about $7 billion or $8 billion in valuation. They had their IPO back in November 2020, I think, and then the stock's tripled since then. It's an interesting company. It's one, like I said, I've kept on a watch list. It's well worth your time to research and take a look at, particularly in this environment. This is, I think, a relatively safe stock. My whole portfolio is bleeding out. It's been bleeding out for a couple of weeks. I wish I owned MP Materials. That would be one that I would point out is a good stock to own in this environment.
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Is MP Materials a Good Stock to Buy in 2022?