There are lots of ways to tell investors you believe in your company. Press releases are cheap. Conference call optimism is cheaper. Buying stock with your own money is the version that comes with a receipt.
That's what happened at MP Materials Corp. (MP) this week. The rare-earth producer rose nearly 3% Friday, extending gains after company executives and a director purchased about $3.35 million in stock earlier in the week.
The move stood out even more because the broader market was having a rough day. The Nasdaq fell 1.99%, the S&P 500 declined 0.85%, and the Materials sector slipped about 0.2%. MP Materials went the other way.
The gains followed strong quarterly earnings and progress in the company's rare-earth magnet business.
Insider Buying Draws Investor Attention
Three MP Materials insiders purchased a combined 92,476 shares on Nov. 10 and Nov. 11.
Chief Financial Officer Ryan Corbett bought 5,476 shares worth about $198,500.
Director Randall Weisenburger purchased 55,000 shares for approximately $1.98 million. Chief Operating Officer Michael Rosenthal acquired 32,000 shares worth about $1.18 million.
The purchases may signal management's confidence in the company's outlook. When the people who know the business best start writing checks, investors tend to notice.
Strong Earnings Support Outlook
The confidence isn't coming out of nowhere. MP Materials recently reported third-quarter revenue of $147.66 million, up 176% year over year. Revenue exceeded Wall Street's $117.47 million estimate.
The company earned 4 cents per share, beating expectations for a 2-cent loss.
CEO James Litinsky said MP Materials completed General Motors' qualification process. The milestone clears the way for commercial magnet shipments and related revenue beginning in the fourth quarter.
The company ended the quarter with approximately $1.34 billion in cash and short-term holdings.
Analysts Outlook and Technical Analysis
MP Materials carries a consensus Buy rating and an average analyst price forecast of $65.33.
On Nov. 9, Canaccord Genuity maintained its Buy rating but lowered its price forecast to $70. Barclays maintained its Overweight rating while reducing its forecast to $54. Morgan Stanley maintained its Overweight rating and lowered its price forecast to $66 on Oct. 7.
Despite Friday's gains, technical indicators remain weak.
The stock trades above its 20-day simple moving average of $38.16 but below its 50-day average of $43.93 and 200-day average of $53.72.
Its relative strength index of 46.16 suggests neutral momentum. Meanwhile, market data assigns the stock a momentum score of just 5.76.
Traders are watching resistance near $42.50 and support around $37.50.
MP Stock Price Action
MP Stock Price Activity: MP Materials shares were up 2.88% at $38.53 at the time of publication on Friday, according to market data.
