Several rare earth mining stocks have declined precipitously by over 50% as momentum-based investors who were focused on rare earth element prices have left the space and short interest has increased. Since our rare earth investment thesis has been based solely on fundamentals and not on sentiment or technical analysis, They have spent the last three months conducting an in-depth review of the sector in order to test our thesis and determine whether this is again, a buying opportunity. As detailed in the following pages, the fundamental investment thesis on Molycorp is significantly stronger than it was in the spring when they assigned a $120 price target on probability weighted scenario analysis and a 1.0x P/NPV multiple. They have established a new year-end 2012 price target of $105/share based on a 0.75x P/NPV multiple for our Molycorp net present value estimate of $139/share.
Working URL: https://seekingalpha.com/article/319127-molycorp-a-second-chance-part-i-of-iii
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