The Lynas Rare Earths Ltd (ASX: LYC) share price charging higher again today.
Shares in the S&P/ASX 200 Index (ASX: XJO) rare earths explorer and producer finished the day trading up 4.01% at $10.64 per share.
That puts the Lynas share price up a phenomenal 21% since the closing bell last week Tuesday. For some context, the ASX 200 is down nearly 2% over that same time.
The past week’s gains give the company a market cap of $9.6 billion.
We’ll look at why Lynas had such a strong week in a tick. But trouncing the benchmark returns is nothing new for the company.
What’s been driving shares in the ASX 200 rare earths’ producer higher?
Lynas shares have performed strongly, though certainly not without some dips, since mid-2020.
Spurred on by Western nations seeking to break China’s strangle hold on the critical rare earths markets, the Lynas share price has rocketed 165% since 31 December 2020.
Speaking about Lynas to The Motley Fool’s Tony Yoo last week, Red Leaf Securities CEO John Athanasiou said:
It’s the only significant producer of rare earth materials outside of China. Rare earth materials are required for all sorts of things that we consume on a daily basis — from electric cars, mobile phones to superconductors. And the western world really wants a producer outside of China, so it enhances strategic importance.
That’s the bigger picture. But what drove the Lynas share price to a 23% gain over this past week?
Why did the Lynas share price surge 23% in 5 trading days?
A fair bit of the heavy lifting came last Friday.
This was the day the miner reported its half year financial results for the 6 months ending December, which saw both revenue and profits up strongly year-on-year.
Net profit after tax (NPAT) of $156.9 million leapt 286% from 1H FY21 figures. And revenue increased to $314.8 million, up from $202.5 million in the prior corresponding half year.
The Lynas share price closed up 8.1% on Friday, finishing the day at $10.15 per share.
The post Why has the Lynas (ASX:LYC) share price rocketed 21% in a week? appeared first on The Motley Fool Australia.
Should you invest $1,000 in Lynas right now?
Before you consider Lynas, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Lynas wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
- Here are the top 10 ASX shares today
- Lynas (ASX:LYC) share price jumps amid record interim net profit
- The ASX share that the whole world is relying on
- Here’s how rich Lynas Rare Earths (ASX:LYC) shares have made ASX 200 investors over the past 2 years
- What even are rare earths and why are ASX shares with exposure always in the spotlight?
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/u56qa3f
Leave a Reply