MP Materials: The Western rare earth champion
A bet to close the US' rare earth bottleneck has turned into a $11bn national champion with 10 year of visibility and at the center of the country's nascent reshoring efforts
Welcome to the 37th investment case, 31th resilience, 19th reshoring/sovereignty and 12th electrification & grids idea on Crack the Market (and the most comprehensive MP Materials investment case you will find online)! Join me as I dissect the company closing one of the main bottlenecks in Western supply chains, becoming a national/Western champion thanks to a transformational deal giving it a decade of visibility and price/demand certainty whilst leaving significant upside to become a critical provider to Western companies and countries.
Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.
Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.
You can already read my first 36 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:
ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.
LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.
Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.
Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.
Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.
Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.
Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.
Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.
RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.
CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.
Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.
Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.
Halma (resilience idea): High quality compounder in safety, health and environmental technologies.
Quanta Services (resilience & reshoring idea): Countercyclical compounder riding a multi decade infrastructure buildout.
Infineon (China idea): Power semiconductor leader with strong structural drivers (AI power and China auto) amidst a cyclical recovery.
Hubbell (resilience & reshoring idea): Pure play on US electrification demand driven by AI and grid investment cycle.
Iberdrola (resilience & reshoring idea): Best integrated utility in the world with a stellar track record and solid growth driven by networks and renewables
Nvidia (AI & data center idea): The backbone of the AI world is unstoppable.
Veolia (resilience & reshoring idea): Resource management giant (water, waste, energy) due for a rerating.
TJX (resilience idea): The retail giant that keeps winning.
DSM-Firmenich (resilience idea): The diversified ingredient powerhouse benefiting from a transformational deal.
Zoetis (resilience idea): Leader in animal healthcare.
Prysmian (reshoring idea): Global cable leader entering a golden age.
Bentley Systems (resilience & reshoring idea): The software compounder bringing infrastructure into the AI age.
Givaudan (resilience idea): The highest quality and most resilient ingredient compounder has a compelling valuation.
First Solar (reshoring idea): The rising Sun in a new electricity supercycle.
Arcadis (resilience & reshoring idea): An engineering and design consultancy giant poised for a rerating.
Thermo Fisher (resilience & reshoring idea): Life Science tools giant just had its clearing event and is a stealth reshoring winner.
Nexans (reshoring idea): Electrification pure play with visibility into 2030.
Croda (resilience idea): A covid darling with a ridiculous valuation is at an inflection point.
Copart (resilience idea): One of the best businesses on Earth is being sold off, should you jump in?
Schneider Electric (resilience & reshoring idea): The Electrification champion that keeps compounding.
Cadence (resilience idea): A defensive compounder in the semi space & one of the most profitable software businesses in the world is getting better.
SAP (resilience idea): The unstoppable growth engine behind every business.
FICO (resilience idea): The Score Behind the Score.
Siemens (resilience & reshoring idea): The best conglomerate on Earth is sitting on EUR70bn of optionality.
After reading this article, you will understand why this company is so strategic for the US as the only vertically integrated rare earth producer in the West, what it does, why it has performed so well after a transformational deal with the DoD, why it is at the center of US and Western reshoring efforts and why it is one of the biggest winners from the deglobalization of the world and rising US/China tensions.
In this article I go through:
MP’s business and how this contrarian bet on Western rare earth production turned its founder into a billionaire.
What are rare earths, why are they so critical to our modern economies and why China dominates this value chain.
How the company aims to become a fully integrated producer of rare earth magnets, what seemed like a long shot only a few years ago.
How a transformational deal with the DoD has underwritten the whole strategy whilst leaving upside to the company.
How to think about the recent news, current valuation, future catalysts and upside/risk for the most exciting mining company in the world.
