The Lynas Rare Earths Ltd (ASX: LYC) share price is enjoying a tremendous run over the past fortnight.
In late afternoon trade, shares in the rare earth elements miner have risen 1.65% reaching $7.40. This puts the company within an 8% striking distance of its 52-week high.
The perplexing aspect of the recent move is the lack of price-sensitive announcements. While the Lynas share price has been trending upwards, new information is sparse. Though, there might be crumbs right under our noses — let's have a look.
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What's under the hood of the Lynas share price?
To the relief of shareholders, the recent run follows what was a disastrous period between 15 September and 6 October. During that 3-week span, nearly 20% of the company's market capitalisation was demolished. However, the tides have turned since then.
With such a sudden turnaround in share price direction, it begs the question: what is the cause? Although nailing down exactly what could be influencing the rare earth miner's movement, there are a few details that could make for contributing factors.
Firstly, Lynas' annual report for FY21 was released to the market on 12 October. As per usual, the annual report contains a far more granular breakdown of the year gone by. At 108 pages, there's plenty of details for any investor to sort through. Though, the letter from the chair, Kathleen Conlon, might have hit home the scale of Lynas' growth ambitions.
Commenting on the company's vision for growth, Conlon stated:
The Lynas 2025 growth vision represents Lynas' plan to grow with the market and meet this accelerating market demand for Rare Earths. As part of this plan, work on the new Rare Earths Processing Facility in Kalgoorlie progressed well throughout the year.
Following the successful completion of a $425 million capital raise, the company looks well-capitalised to deliver on the construction of its Kalgoorlie rare earths processing facility. At the same time, shareholders who participated in the raise are now up 222% with new Lynas shares issued at a price of $2.30.
Buy the rumour sell the news
Every now and then, when a company is expected to report soon, investors will bid up the share price in anticipation. While this might not be the case for the Lynas share price, the company is expected to announce its quarterly results on Friday 22 October 2021.
After having delivered a record profit for FY21, some investors might be speculating on the success of the first quarter for FY22. Importantly, the prices of some rare earths, such as neodymium, have recovered after a sharp fall. Considering Lynas' business is commodity-driven, the sale price of its ore will be critical to its result.
At present, the Lynas share price trades on a price-to-earnings (P/E) ratio of 38.6 times.
