USA Rare Earth: The Serra Verde Dilution May Be Worth It

Bernard Zambonin 1.81K Followers Follow Summary USAR more than doubled after my April call before giving it all back, but Serra Verde leaves the long-term thesis stronger than where it started. The deal fills the biggest hole in the mine-to-magnet story by adding a producing upstream asset. The dilution only works financially if Serra Verde moves beyond MREC and toward higher-value oxide sales. At roughly $14, the market appears to price in partial success—not flawless execution. pingingz/iStock via Getty Images In early April of this year, I wrote a thesis on USA Rare Earth ( USAR ) entitled "Buying The Pullback Ahead Of Key Catalysts." Since then, the nature of the thesis and the catalysts have proven to This article was written by Bernard Zambonin 1.81K Followers Follow Equity Research Analyst at DM Martins Research.I cover stocks that are often undercovered, focusing primarily on Brazil and Latin America — but I also occasionally write about global large caps. My work can also be found on TipRanks, where I contribute regularly, and on TheStreet, where I was a frequent contributor in the past.- Disclaimer: All views expressed here are my own and do not necessarily reflect the views or official positions of DM Martins Research. My articles and analyses are for educational and informational purposes only and should not be taken as investment advice. Always do your own due diligence before making any investment decisions. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in USAR over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.