Ramaco Resources, Inc. (METC): A Bull Case Theory

We came across a bullish thesis on Ramaco Resources, Inc.  on The Small Cap Strategist’s Substack by Strategist and Architect. In this article, we will summarize the bulls’ thesis on METC. Ramaco Resources, Inc. 's share was trading at $25.93 as of August 29^th. METC’s trailing and forward P/E were 9.47 and 5.49 respectively according to Yahoo Finance.

Ramaco Resources Inc. (METC) stands out as a unique investment that cannot be analyzed like a typical coal company. The firm is executing a strategic pivot to become a “dual platform” company, combining low-cost metallurgical coal operations with the mining and processing of rare earth elements (REEs) at its Brook Mine in Wyoming. This mine represents the first new REE project in the U.S. in over 70 years, positioning Ramaco to challenge China’s dominance in minerals critical for defense, electric vehicles, and high-tech manufacturing.

Brook Mine’s geology offers a rare advantage: the REEs are commingled with soft coal and clay, making extraction easier, cheaper, and free from the radioactivity issues common to conventional hard-rock REE deposits. Market valuation, however, fails to reflect this transformative potential. A preliminary economic assessment by Fluor Corporation assigns the project a pre-tax NPV of $1.2 billion—nearly equal to Ramaco’s total enterprise value of $1.7 billion—implying that investors are attributing little to no value to the REE asset.

The recent $200 million upsized public offering further de-risks the thesis, funding the REE project’s acceleration toward commercialization and signaling management’s confidence. The investment case is thus a sum-of-the-parts arbitrage: investors gain a stable, cash-generating metallurgical coal business while effectively receiving a call option on a fully-funded, strategically vital rare earths operation. Ramaco illustrates that true alpha emerges not from deep specialization but from connecting seemingly unrelated opportunities—linking regulatory developments, technology trends, and cyclical industry dynamics to identify undervalued, multi-dimensional growth prospects.

Previously we covered a bullish thesis on Ramaco Resources, Inc. (METC) by Unemployed Value Degen in October 2024, which highlighted the company’s low-cost metallurgical coal operations, growth potential, and the strategic value of its rare earth element discovery. The stock has appreciated approximately by 141% since our coverage as the thesis played out. The Small Cap Strategist shares a similar view but emphasizes the fully-funded acceleration of the REE project.

Ramaco Resources, Inc.  is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held METC at the end of the first quarter which was 22 in the previous quarter. While we acknowledge the potential of METC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.