This is an excerpt from an article I originally published on Seeking Alpha on October 30, 2011. Click here to read the entire piece.)
Mark Smith, CEO of rare earth miner and producer Molycorp (MCP), appeared on CNBC again to discuss his company’s business and conditions in the industry. Smith provided an interesting “sneak peak” into what we can expect for earnings this week, November 10:
“We’re selling every kilogram of the material we’re making and we’re realizing the highest margins in the history of the company. I think we’re doing very, very well right now. We’re continuing to increase our volumes and our revenues every quarter…Demand is there, pricing is there…We have not seen any slowdown in customers wanting our products.”
{snip}
{snip} Smith…{snip}…clearly recognizes that he cannot build a sustainable business based on prices that spiral ever upward. {snip}
Two weeks ago, I warned that MCP was potentially on the edge of another major sell-off (see “Chart Review: Molycorp On Edge of Another Big (Downward?) Move“). Fortunately, the downdraft never occurred. Instead, the stock has stabilized.
Molycorp remains a stock to buy on the dips.
Be careful out there!
This is an excerpt from an article I originally published on Seeking Alpha on October 30, 2011. Click here to read the entire piece.)
Full disclosure: long MCP