Among leading growth stocks, today's IBD 50 Stocks To Watch pick is metals miner MP Materials, after the company reported earnings last week.
The leading miner of rare earth minerals has been working on a cup base with a 53.13 entry since early January, according to MarketSmith. Shares pulled back alongside the market last month but recently reclaimed the 50-day line on Feb 25.
The Las Vegas, Nevada-based minerals miner offers investors serious growth, with its double-digit and triple-digit year-over-year EPS and sales growth in recent quarters. Fourth-quarter earnings were released on Feb. 24, and showed MP Materials topping estimates.
The stock dipped on Monday, down around 3%, but is holding last week's net gain of nearly 7%. Currently, shares sit 14% below the proper buy point and have a little ways to go before the stock is actionable. But the relative strength line shows positive action in recent weeks as it closes in on new high territory.
Growth Stocks To Watch
MP Materials managed to grow revenue and earnings at an impressive rate in the two most recent quarters. Year-over-year earnings growth came in at 72% in the most recent quarter, to 31 cents a share. Sales rose 135% to $99.1 million.
MP Materials is a leader in the metal ores mining industry group, which ranks No. 12 of the 197 groups IBD measures. The stock, with its 98 Composite Rating, ranks second-highest in the group by that metric, outpaced currently by Australian firm BHP Group which holds a Composite of 99.
The miner's fourth-quarter earnings highlighted that "quarterly production climbed 10% year over year." Meanwhile, their production of 42,413 metric tons in 2021 represents the "highest annual primary rare earth production in U.S. history."
MP announced a strategic collaboration with General Motors on Dec. 9 to develop a fully integrated U.S. supply chain for rare earth magnets. According to the news release, "MP Materials will supply U.S.-sourced and manufactured rare earth materials, alloy and finished magnets for the electric motors used in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado EV and more than a dozen models using GM's Ultium Platform, with a gradual production ramp that begins in 2023."
"2021 was a banner year for MP Materials, headlined by record annual production," said MP Materials CEO James Litinsky in a recent news release. "In Q4, in addition to delivering strong performance, we began executing on our magnetics strategy, signing a long-term supply agreement with General Motors and announcing our initial magnetics facility."
