Despite the REE sector being widely written about in financial publications and talked about on cable financial news networks, shares of rare earth penny stocks have slipped under the radar.
Many American investors solely follow Molycorp (MCP:NYSE), Rare Earth Elements (REE:AMEX) and Avalon Rare Metals (AVL:AMEX), with Molycorp being the only one of the three that actually produces at this time.
Even in these uncertain times, rare earth metals are key components in the production of green cars, wind turbines, lap tops, cell phones, solar panels and yes, products as simple as light bulbs.
As of Monday’s close, unless you are a bottom fisher, it might sound crazy to even consider stepping in and going long one of the three RE stocks mentioned above. Never mind stepping in and purchasing one of the once hot rare earth penny stocks.
However, people forget that rare earth penny stocks are not considered “concept stocks” which often carry high multiples in bull markets, but frequently crumble when markets turn negative.
Aside from the industrial uses mentioned above, there are real supply and demand concerns to think about. From most accounts China happens to produce roughly 97% of rare earth metals and prices have risen sharply in the last few months. China’s stranglehold on these elements has caused bipartisan grumblings in Washington out of future national defense concerns.
Now why this week might not be the best time to buy speculative issues such as MCP, REE and AVL, they certainly deserve to be watched at these levels. And what makes just as much sense, is watching a few different rare earth penny stocks, just in case the sentiment changes or a political event occurs. Here are some companies that have tiny market caps and are underfollowed. The super speculative names and symbols are listed below:
Rare Earth Penny Stocks to Watch
Rare Earth Metals (RAREF.PK)
Quantun Rare Earth (QREDF.PK)
American Rare Earths and Metals (AREM:OB)
In this market these rare earth penny stocks could get even cheaper, so just add these names to your stocks watch list for now.
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