Why Molycorp's Shares Lost Their Shine

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of rare-earth mineral miner Molycorp (NYS: MCP) fell 28% today after the company reported earnings.

So what: Revenue rose 5% to $104.6 million in the second quarter, but the company reported a loss of $67.6 million, or $0.71 per share. Analysts had expected $105.9 million in revenue and a profit of $0.03 per share.

Now what: Prices for rare-earth minerals have fallen off a cliff, and Molycorp's financials are suffering as a result. It has tried to add downstream production to ease the pain in pricing, but so far it has yet to lift earnings. Until Molycorp reaches full production and prices stabilize, I'm staying far away from this stock.

Interested in more info on Molycorp? Add it to your watchlist byclicking here.

The article Why Molycorp's Shares Lost Their Shine originally appeared on Fool.com.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.