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« The Team In Travel Mode | Main | Uranium: $110/lb for December delivery »
Thursday
Nov082007

Uranium Stocks On The Move Again

After enduring a large correction in the uranium spot price, and an even larger pullback in uranium stocks, things appear to be on the move again in this sector.

Uranium Stocks On The Move Again: U

Uranium Participation is moving upwards now, reflecting the recent rise in the uranium spot prices, which has risen to $93/lb this week.


As those of you who are familiar with the company will know, Uranium Participation is not a uranium mining stock or uranium exploration stock, but a fund of uranium metal. Uranium Participation simply holds physical uranium and so tends to move up and down with the uranium price. This offers investors exposure to the uranium market without the risks of mining or exploration and it has been a BUY in our portfolio for some time.




Uranium Stocks On The Move Again: AXU



One of the quickest recoveries has been made by Aurora Energy Resources, which has enjoyed a sharp rally of over $5 to near $17. This stock is also a BUY in our portfolio and is currently up over 13%. Aurora has a world class project in the Central Mineral Belt in Labrador, Canada and the good fundamentals of this property will carry Aurora higher, especially with higher uranium prices.

Uranium Stocks On The Move Again: Mega

Mega Uranium was severely punished in this correction and the credit crunch, falling over 66% from its highs of around $9.00 in April. But this uranium stock is now on the road to recovery having nearly doubled from its low and its up 22.75% in our uranium stocks portfolio.

Uranium Stocks On The Move Again: LAM


One final example to show the turnaround in the uranium market is Laramide Resources, which has climbed 106% from its low! This stock is a BUY in our portfolio and it is currently showing a paper profit of 56%.

We first thought the turnaround had begun on August 28th and the recent behaviour of the market confirms this view.


This was a correction, a severe correction. We have seen similar corrections in this uranium bull market before, but this was particularly sharp as we had the added affect of the credit crunch where traders and investors were selling literally anything, regardless of fundamentals to generate cash to pay margin calls.


On August 21st in our portfolio update, we signalled BUY on the above stocks and amidst the carnage of the credit crunch and the uranium market correction we said, “we still expect LAM to bounce back from these levels” and described Uranium Participation as “at a discount” and Aurora appeared to us to be “severely oversold”.

We hope that those of you who were brave enough to hold throughout the summer or add to your holdings are now enjoying the recovery. Throughout the summer we were urging our readers to hold through the chaos and to buy at those cheap prices. In hindsight we appear to have made a good call there, and we are still bullish on uranium and uranium stocks, maintaining our target price of $200/lb for yellow cake.

Many uranium stocks will benefit greatly from higher uranium prices, and some projects will still prove to be extremely profitable at current price levels. Stay updated on the uranium market and informed on uranium stocks by subscribing to our FREE Uranium Stocks Newsletter, to subscribe simply click here and enter your email.

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Reader Comments (12)

I notice none of your graphics show prices near highs from earlier in the year. Can I just draw your readers attention to an ASX uranium stock, Bannerman Resources BMN on ASX, make a chart in Yahoo. See BMN has last week been in the zone of all time highs from earlier in 2007. This stunning outperformance could be due to a slow realisation that they are putting the bricks in the wall for a substantial open cut mine in Namibia, a junior version of nearby Rossing. Also heading for TSX listing I think.
Yes I hold some BMN.

November 10, 2007 | Unregistered CommenterWarwick Hughes

We must hold our hands here; we do not know this stock. If you would like to do an article on Bannerman Resources then we would be pleased to publish it giving you the credit.

November 11, 2007 | Unregistered CommenterUranium Stocks

At this ASX page;
http://www.asx.com.au/asx/research/CompanyListed.jsp?coName=B
look in list for BANNERMAN RESOURCES LIMITED (BMN), click on link BMN,
then scroll down page for list of BANNERMAN RESOURCES LIMITED announcements.
List of downloadable pdf reports. Their latest quarterly will be worth a read.
31/10/2007 Quarterly Activities Report.
However the 17/09/2007 Scoping Study Results describes the status of their main project, Goanikontes near Rossing.
There is also their 17/09/2007 Company Presentation, for those who like presentations.
Up the page there is a link to their website,
http://www.bannermanresources.com.au/
You will find a Westwind Partners report under Latest News at right, link "New Contender Emerges". I had not seen this report before, what more can I add ?

November 11, 2007 | Unregistered CommenterWarwick Hughes

Hello,

Thanks for your great blog! I've been subscribing for several months now and have purchased stocks you have recommended.

I just thought it might be worthwhile for you to alert your voting American readers to John McCain's outspoken support of the nuclear power industry to help address global warming.

John McCain has been a leader on the issue of global warming... He has offered common sense approaches to limit carbon emissions by harnessing market forces that will bring advanced technologies, such as nuclear energy, to the market faster....

More can be found on his website at: http://www.johnmccain.com

Thanks,
Dan

November 13, 2007 | Unregistered CommenterDan Probert

Dan,

Thanks for this, its a great help. The readers really do add value to this site and it is very much appreciated by the team.

November 13, 2007 | Unregistered CommenterUranium Stocks

I was startled Friday when I logged into my account and found a gain of nearly %5000 in one of the uranium stocks I own. I am 99.9% sure this is a computer glich of some kind, but google finance, big charts, and market watch all report the same gain. The stock - Western Metals Limited - bought at .22 is now valued (a one day gain) at $13.37?

Anybody know what is up?

November 18, 2007 | Unregistered CommenterScott

Scott, I have no idea, but it sure makes my account look fantastic! I too am in at .22 I can not imagine it is correct though. Nice to dream that some day.... well maybe.... ugh... probably not.

November 18, 2007 | Unregistered CommenterLeece

Anyone here freaked out by general market conditions and the hits we are getting during what should be strong seasonals? I think a general market sell off will hurt big time no matter what the fundamentals of U are. What do others say?

November 19, 2007 | Unregistered Commenterari

ari: I think U stocks been picked on for tax-loss selling. Fundamentals are there but apparently, the market is acting irrationally.

Just hold on to your shares and never sell them on the cheaps unless you want to cut your losses. Use this time to average down or buy more shares (if the falling knife stops falling!).

November 27, 2007 | Unregistered Commenterpho

Thanks. No way anyone gets my shares and I've got plenty. This too shall pass.

November 27, 2007 | Unregistered Commenterari

Could someone please explain what is happening now with the Uranium market. I own Mega Uranium and the stock is disappearing. The company won't comment and TSX won't comment. Thank you

May 7, 2008 | Unregistered CommenterPeter Goodridge

Gidday Peter Goodridge and group,
I see on this website;
http://www.wallstreet-online.de/diskussion/1096586-110-101/mega-uranium-ltd-mga-to-james-dines-top-pick
that Mega in an Apr 7th statement summarizing their exploration and development around the world, that their most advanced projects seem to be "Ben Lomond and Lake Maitland uranium resource projects in Australia."
Both note Peter in states that do not currently allow uranium mining.
Why Mega would spend so many precious shekels on projects with no current pathway to production, I have no idea.

May 7, 2008 | Unregistered CommenterWarwick Hughes

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