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« Gold Drivers Competition: Update 10 May 07 | Main | News Flash: Uranium Futures trading at $140.00! »
Wednesday
May092007

Uranium stocks: Strange Days!

This current situation reminds me of a song by The Doors called “Strange Days” produced by Electra/Asylum Records in 1985, which is apt.

The Doors


We are all aware of the old adage “Buy the rumour and sell the news” so you have sold on the good news. BUT! What if the good news just keeps on coming? You will be all sold out by the time the stampede for uranium stocks arrives. Then what? Buy back in near the real top?

We now have a spot price of $120/lb. We started this year at around $70/lb so that is an increase of $50/lb or 71% in just over four months.

Graph
Uranium chart 09 May 07


We have been bombarded with calls telling us that The Futures Market has kicked off this week with figures of around $140/lb for June delivery, that’s next month!

What would happen if any of the other commodities such as Gold, Silver, Oil, Gas or Copper were to increase by 71% in the next four months? The respective Bulls would change their drinking habits and stop drinking house wine and become connoisseurs of fine champagne. We watched yesterday as a fair number of uranium stocks put in a red day and a few managed a modest gain. A troll through our emails showed that only two of our readers were actually buying yesterday. Maybe we have missed something here and history will reveal the error of our ways, if you know what that something is then please let us know. If we haven’t missed a trick then we are sticking to our forecast of 200/lb, which you know we have been banging on about, for a long time and not in a whimsical fashion either, as this is what we believe.

All across the globe there are new announcements from various governments of their intentions to pursue an enlightened nuclear policy. Are these the smart ones? No! the smart ones are aware of the effect that such proclamations are having on the price of uranium. The smart ones know exactly what their future requirements are and so they will secure the supply before they make known their dependency on uranium. Would you ever begin negotiations with someone by informing them of your desperate need for their product? What a bunch of Loonies.

The investment world in general is waking up to the importance of uranium and the potential for profit by investing in uranium stocks. Sooner or later the penny will drop and the utility companies along with the brighter governments will go directly to the source and mop up any uranium miner of substance.

Pawn the cat, make do with one car, do two jobs, do whatever it takes to raise the cash and put a foot on some uranium stocks as fast as you can.

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Reader Comments (14)

I know, I know. My couple of beauties were down today, too, in an unenlightened selloff. I'm not worried at all, however--about any of my stocks, frankly. I'll wait as long as need be as I know the value of what I'm holding. Once the stocks start to take off though, they'll really take off.

May 10, 2007 | Unregistered CommenterGMiki

Just got onto this site, can you reccomend any good uranium stocks in Australia with good upside in the near future

John

May 10, 2007 | Unregistered Commenterjohn wyke

It's got me beat. I've had a decent investment in Paladin for some months. I've watched Paladin commission the Langer Heinrich mine in Namibia ontime and on budget, seen the uranium price rise around 25-30%, the Australian Labor Party ( probably the next Australian government) reverse a long time ban on new uranium mines, and still this stock is off around 10% from when I bought.

I think its a lesson in how market hype can push investors in a fickle manner and how real speculators are full of beans. I'm sitting still nonetheless as I can't see any real alternatives to uranium when it comes to producing base load electricity in a clean and responsible manner. I'm comforted by Jesse Livermore's famous remark that he made most of his money just sitting and watching and perhaps the next bout of price rises well again draw attention to uranium as clean alternative to coal. If anyone's looking to buy a uranium producer with growing reserves and cash flow then I think Paladin is pretty cheap at A$9.15.

May 10, 2007 | Unregistered Commenterjoe docherty

Greetings.

U.S. Government May Sell "Very Small" Amount of Uranium in 2007

It would be interesting for your subscribers to hear your comments about the possibility of the government's proposed plan to sell up to five million pounds of U308 from federal inventory during 2007. What are the consequences for the market?

Thank you and regards.

May 10, 2007 | Unregistered CommenterUrs Thaler

Strategic Reserve? Five million pounds? Where have these governmental idiots been? Lower Slobovia? If we actually have a Strategic Reserve, why would we sell any amount from it, especially now when the entire world is just waking up to the realities of nuclear power again? Those power plant people must have a mole in the Dept of Energy!

The people that run this site are spot on! Keep up the good work!

dbabink

May 10, 2007 | Unregistered CommenterDon Babinchak

Down ? Denison +8% (+23% last 5 sessions from 12 to 14.85)
SXR +2.72%
Fronteer -1.22%
Uranerz -1.41%
Energy Fuels +.79%
Paladin +1.29%
Energy Metals +5.43%
Strathmore +5.9%
Uramin +6.44%
concentrate on current and near-term producers

May 10, 2007 | Unregistered Commenterdave

1. Gmiki, we feel the same and we will hold and not sell.

2. John, We do have some miners with exposure to the Australian uranium mining industry, but we are not allowed by law to give individual advice. But with the Australian political scene changing we have no doubt that more of our focus will be concentrated on Australia.

3. Joe, We don’t have any money in Paladin, we are aware of it but we just have not bought it. That’s not to say that it is a bad investment it just reflects our lack of knowledge about this particular company. We wrote “Strange Days” because we don’t understand the stocks being sold when the underlying asset is on a flyer.

4. Urs and Don, We have this topic on the forum and hopefully we can gather a number of diverse views from our readership, which will be of benefit to us all. Neweagle has a post under Uranium on the forum or you can follow this link and watch things develop. http://www.uranium-stocks.net/forum/viewtopic.php?t=74

Many thanks for making the effort to comment it really appreciated by all of the team here.

May 10, 2007 | Unregistered CommenterUranium Stocks

Dave,

Thanks for the above list of stocks that you consider are performing.

The point we were trying to make is that they are not performing as well as uranium. Uranium is up 71% this year.

You rightly mention Dennison and FRG, but when we check back they were at this price in February so they haven’t really gone anywhere in fact Paladin was higher in February than it is now.

To us the gap has to close so the stocks go up or uranium comes down – we suffer from an overdose of ‘enthusiasm’ here so we remain very bullish.

May 10, 2007 | Unregistered CommenterUranium Stocks

This is like a bull ready to charge as soon as he sees the red flag. Still mainly under the radar in the US although I see Newsweek had an article about the coming U boom recently. You may need a little more patience but better that than to miss the charge. Check out the near term producer EFR for example. There is no better and experienced management team back in the same mines they had in the 1970's put on hold because of the low U price. This team even built a mill back then. Stock price of EFR is the same as when U price was $70 !!! ... cashed up and ready to rumble.

May 10, 2007 | Unregistered CommenterPeter J

John

I think the intelligent way to play uranium or any resource commodity is to stick with either producers with growing operations and reserves or near term producers. The only pure Aussie explorer in which I have a very small interest is Marathon Resources. Fat Prophets, a large Aussie advisory firm, thinks that this company is sitting on possibly one of the largest undeveloped deposits in Australia but the stock has already appreciated considerably.

The other Aussie explorers are too speculative for my liking...they run on rumours and hype and whether they'll ever get uranium oxide on a ship in my lifetime is questionable. I have found it difficult accessing the Canadian market , but if I had my way I would have a piece of the Uranium Participation Corporation, SXR, Concordia Capital and Energy Fuels Corp. I've bought some Energy Metal Corp in the States. Personally I think SXR, Paladin and The Uranium Participation Corp are the safest and the best plays. Everybody needs to make their own decisions but I do think these guys are worth investigating

Hope this helps.

Joe

May 11, 2007 | Unregistered CommenterJoe Docherty

Joe

Do you have an opinion on Mega Uranium (MGA) or Laramide (LAM)

as they are not mentioned in the above list?

May 11, 2007 | Unregistered CommenterUranium Stocks

http://biz.yahoo.com/seekingalpha/070508/34858_id.html?.v=1

In re the government sales. Doesn't sound too bad.

May 11, 2007 | Unregistered CommenterGMiki

The reason that Paladin (PDN) shares have "foundered" at just above A$9 maybe that many ex-Summit (SMM) shareholders who have converted to PDN have decided to cash up, for no other reason than profit-taking. On the other hand there is lots more coming up for the rest of this year for PDN shareholders, apart from the U3O8 price upward trend.

May 12, 2007 | Unregistered Commenterphh@ihug.co.nz

I think until the "Herd" with with their twilight sleep "long term" mentality move into the sector, speculators, day traders and those who lack patience will move the prices. When the sale of a few hundred shares at the end of the day move a stock %5to15+or-, it is what it is.The greater the discrepancy between the commodity spot price and underlying share price the larger the foundation for those shares to construct or destruct upon. Ultimately, I'm betting construction.
Robert

May 13, 2007 | Unregistered CommenterRobert

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