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Showing posts with label MP. Show all posts
Showing posts with label MP. Show all posts

Monday, July 7, 2025

The importance of Rare Earth Elements (REEs) used in technologies from Smart phones and AVs to National Defense and Space Tech, cannot be overstated!

 


A small, retail investor looking to gain exposure to rare earth materials might consider MP Materials (MP) and Avalon Advanced Materials (AVL/AVLNF),

Here is how I am approaching the investment, with strategies tailored to risk profile, capital allocation, and market timing.


๐Ÿงพ Step-by-Step Investment Approach

1. Understand Their Profiles

CompanyTickerExchangeStageRegionRisk Level
MP MaterialsMPNYSE (USA)MatureUSALow-to-Medium
Avalon Advanced MaterialsAVLTSX-V (Canada) / OTCQB (AVLNF)Early-stageCanadaHigh (speculative)

2. Diversified Allocation Strategy (Example for $10,000 Portfolio)

Risk AppetiteMP MaterialsAvalon (AVL)Cash / Other
Conservative$7,000 (70%)$1,000 (10%)$2,000 (20%)
Balanced$5,000 (50%)$3,000 (30%)$2,000 (20%)
Aggressive$3,500 (35%)$5,000 (50%)$1,500 (15%)

Why?

  • MP Materials gives you stability, cash flows, and policy tailwinds.

  • AVL offers asymmetric upside if Canada builds its rare earth value chain and AVL scales successfully.


3. Entry Strategy

✅ MP Materials (MP):

  • Buy in tranches on pullbacks or near $16–$18 (historical support levels).

  • Consider:

    • Dollar-cost averaging (DCA) monthly.

    • DRIP (Dividend Reinvestment Plan) if/when dividends resume (none currently).

    • Long-term hold (5+ years), especially as magnet plant comes online in Texas (2025–2026).

✅ Avalon (AVL / AVLNF):

  • Higher volatility—treat as venture capital–style bet.

  • Entry near lows (e.g., <$0.20 CAD) may offer multi-bagger potential if milestones hit.

  • Buy small initial position; increase only after:

    • Major partner/funding announcement.

    • Processing milestones with Saskatchewan Research Council.

    • Government contracts or grant programs.


4. Monitor These Catalysts

MP MaterialsAvalon / Nechalacho
U.S. DoD magnet plant progressFinancing or JV for full-scale processing
Q4/Q1 financials (growth + margins)Offtake agreements for heavy REEs
EV/OEM contracts (GM, Tesla, etc.)Indigenous partnerships & ESG momentum
REE price trends (Nd-Pr especially)Federal critical mineral program funding (Canada)

5. Alternative / Supplementary Exposure

If you want a broader REE basket, consider:

  • ETFs (Note: very few pure-play REE ETFs exist):

    • ๐ŸŸข REMX – VanEck Rare Earth/Strategic Metals ETF

      • MP is a top holding. AVL may be included in future if it grows.

      • Includes Lynas (AUS), Iluka, China Northern Rare Earth, etc.

  • Battery Metals ETFs – Broader exposure but with lithium/cobalt/nickel too.


๐Ÿ”š Final Thoughts

RecommendationMP MaterialsAvalon Advanced Materials
Buy if you want...Stability + growth + U.S. policy exposureHigh-risk, high-reward REE growth
Best time to enterOn dips below $20Sub-$0.25 CAD on good volume
Exit horizonHold through 2030Re-evaluate after 12–24 months

Conclusion:
๐Ÿ”’ Use MP Materials as your anchor investment in rare earths—de-risked, policy-supported, with upside from magnet integration.

MPs new Magnet plant in Texas


๐Ÿ”ฅ Use AVL as a speculative levered bet on Canada’s REE independence and heavy rare earth supply growth.