Sunday, March 22, 2015

Top Rare Earth Stocks

"The Prius has 25 pounds of rare earths in it." ~ 60 Minutes

If you watched 60 Minutes tonight, you would have learned that rare earth elements are used in iPhones, magnets, thermostats, televisions, turbines, batteries, luminescent materials, lasers, medical equipment, and numerous other areas. These rare earths, also known as rare earth metals, rare earth minerals or rare earth elements, have caught the attention of investors.

Although they are relatively abundant, these elements are difficult to mine because of their dispersion and and rarely found in a concentrated form. These rare metals group consists of Scandium, Yttrium, Lanthanum, Cerium, Praseodymium, Neodymium, Promethium, Samarium, Europium, Gadolinium, Terbium, Dysprosium, Holmium, Erbium, Thulium, Ytterbium, and Lutetium.

Lithium and manganese are sometimes referred to as rare earth metals due to their rarity, but technically, they are not part of the rare earth element family. The simplest way to invest in these elements is b y purchasing stocks involved in the mining of rare earth metals, more than 25 of which have been turned up by  Keep in mind that many of these have low market caps and are therefore very speculative.

One example is Rare Element Resources Ltd. (REE) is a Lakewood, Colorado based $27 million market cap company which explores and develops rare earth mineral and gold properties. It owns the Bear Lodge Property in Wyoming, which has one of the largest disseminated rare-earth element deposits in North America, according to the US Geological Survey. Resources at the company's Whitetail Ridge project includes U. S. Department of Energy critical rare earth elements Europium, Terbium, Dysprosium, and Yttrium, along with other elements Gadolinium, Holmium, Erbium, Thulium, Ytterbium, and Lutetium. The company, which trades on the New York Stock Exchange, has no debt and 21 cents in cash per share. For the latest reported quarter, the company had negative earnings of 29 cents per share.

The company that was mentioned on 60 Minutes was Molycorp, Inc. (MCP), based in Greenwood Village, Colorado, mines and distributes rare earth and rare metal materials, including lanthanum, cerium, neodymium, praseodymium, and yttrium, along with heavy rare earth concentrates, including samarium, europium, gadolinium, terbium, dysprosium. Its primary mine is the Molycorp Mountain Pass mine in San Bernardino County, California. The company has $1.57 billion in debt, and over $211 million in cash, with 76 cents in cash per share. The company reported a $2.70 loss per share for the latest quarter.

A diversified way to invest in rare earth stocks is with the Market Vectors Rare Earths/Strategic Metals Exchange Traded Fund (REMX). This ETF has a goal of tracking the performance of the Market Vectors® Global Rare Earth/Strategic Metals Index. It has price to earnings ratio of 14 with a dividend yield of 1.5%.

For a free list of rare earth metals stocks, which can be downloaded, sorted, and updated, go to This site also has a list of lithium stocks, which technically are not rare earth stocks, but are often included in the same investment industry.

Disclosure: Author did not own any of the above at the time the article was written.


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