Uranium Participation Corp: Add to Holdings
Tuesday, April 24, 2007 at 2:05PM
Uranium Stocks in Uranium Mining Stocks
Uranium Participation Corp has been on our Uranium Stocks BUY list since November when it was trading at under $12 and Uranium Participation did very well, rising to C$18.76 in a small number of months.

Uranium Participation Corp Chart Analysis April 2007

However it has now experienced a pullback to $15-$16...is now a time to add to your holding or if you haven't yet bought Uranium Participation, is now the time to buy?

Throughout its history of trading, Uranium Participation has usually tracked the uranium price and for the majority of that time it was being traded at a premium. So its market capitalization was larger than the net asset value of the uranium it was holding.

In case you are not too familiar with Uranium Participation, this is not your regular uranium mining or exploration company. Instead of mining or exploring for uranium, Uranium Participation simply purchases uranium, in the form of Uranium oxide in concentrates (“U3O8”) and Uranium hexafluoride (“UF6”). Therefore this gives investors the exposure to rising uranium prices without the risks of mining or exploration.

The stock is currently trading under C$16 with a market cap of $890,815,233. The NAV of the company is $886,279,870 using the current Uranium price of $113/lb. So the company is pretty much trading at the same value of its assets, the uranium holdings.

Considering Uranium Participation usually trades at a premium so now could be a good buying opportunity, especially if you believe as we do that the price of uranium is going much higher or if you believe that the premium that this stock usually trades at will be reinstalled.

Technically speaking, Uranium Participation has fallen but found support at its 50dma and recovered slightly, perhaps suggesting that this correction is over and Uranium Participation is set to move higher. The STO is lower than it has been in over 6 months and the RSI is also at the bottom of its trading range.

In conclusion, if you have not bought into this stock then now could be a good time to make a purchase, if you do own the stock and wish to add to your holdings, then this pullback could present a good opportunity.

Uranium Participation trades on the TSX as U


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