5 Best Commodity Stocks To Buy on the Dip

In this article, we discuss the 5 best commodity stocks to buy on the dip. If you want to read about some more commodity stocks to buy on the dip, go directly to 11 Best Commodity Stocks To Buy on the Dip.

5. MP Materials Corp. (NYSE:MP)

Number of Hedge Fund Holders: 36    

Loss in Share Price Over Past Six Months as of December 6: 19%

MP Materials Corp. (NYSE:MP) owns and operates rare earth mining and processing facilities. On September 27, MP Materials said that it was confident in the outlook for rare earth demand despite a recent pullback in prices. A rise in EV demand post-pandemic has led to increasing demand for rare earths, boosting the stocks of firms who mine rare earths. 

On September 28, Canaccord analyst George Gianarikas maintained a Buy rating on MP Materials Corp. (NYSE:MP) stock and lowered the price target to $40 from $47, highlighting the value generation process of the firm was in stages 2 and 3 and it had rising strategic importance.

At the end of the third quarter of 2022, 36 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in MP Materials Corp. (NYSE:MP), compared to 26 in the previous quarter worth $1.98 billion.

In its Q3 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and MP Materials Corp. (NYSE:MP) was one of them. Here is what the fund said:

“ClearBridge has visited and engaged with holding MP Materials Corp. (NYSE:MP), for example, a U.S. mining company with a facility that supplies neodymium and praseodymium, two rare earth minerals used to make powerful magnets found in 90% of EV motors. The facility recycles all water from its process such that recycled water meets 95% of the facility’s water needs, while the rest comes from groundwater. In the recycling process, wastewater is piped to an on-site water treatment plant where it is treated using reverse osmosis and then reused. In a recent engagement with the company, we encouraged it to disclose the groundwater extraction quantities that make up the other 5% and compare these to peers.”