Is USA Rare Earth Under $20 a Bargain or a Trap?
Key PointsUSA Rare Earth has lots of promise.
Shares of USA Rare Earth (NASDAQ: USAR) currently trade around $18, which is over 50% below its 52-week high. Despite this recent sell-off, the analyst does not believe that these shares represent a bargain. USA Rare Earth has ambitious plans to become a global leader in providing critical minerals, rare-earth elements, and magnets. The company is currently operating a mine in Texas and has manufacturing facilities in Oklahoma.
A significant step towards achieving its global status was the acquisition of Serra Verde Group for $2.8 billion. Furthermore, USA Rare Earth is investing in expanding its processing capabilities through its investment in Carester. Plans are also underway to build a new rare-earth metal and magnet manufacturing operation in South Carolina.
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