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« How Far Will The Fed Go? | Main | Uranium Stocks: Monopoly Anyone? »

Uranium Stocks: A Bounce Back!

Helped partially by the Fed Rate Cut, uranium stocks have bounced in recent trading after falling sharply since the beginning of 2008.

LAM 250108

One of the biggest gains was made by our Laramide Resources, which rose nearly 30% in just one day! Since the beginning of the week, LAM has risen from around $3.00 to nearly $5.00 which is a massive turnaround. Laramide is be no means alone in its rise, as other quality uranium stocks have also bounced. Two of our favourite stocks, Ur-Energy and Mega Uranium, have risen roughly 25% and 40% in the last few days respectively.

MGA URE 250108

The first conclusion one draws from this recent activity in uranium stocks is, that the emergency Fed rate cut has triggered a rise in every stock on the market. This of course is true and has had a big effect on the stock market this past week.

However when one takes a deeper look at what has gone on here we discover that there is a much bigger force driving these uranium stocks higher. It's our good old friend, fundamentals.
These are all great companies, with great fundamentals and a great outlook for the future. The recent positive news releases have reminded investors just how undervalued these uranium stocks are at present. Laramide reported drill results of 77 Metres @ 0.12 % U3o8 from 13 metres depth at their Westmoreland project. Mega Uranium also had some good news as they found 140 metres of 0.042% U3O8 and 0.76% copper at Igor, plus 76 metres of 0.417% U3O8 and 7.37% copper, and Ur-Energy had some test results showing 84% to 93% recovery at their Lost Creek property in the USA.

These good results are an indication of the great fundamentals that are backing the rise of quality uranium stocks, and will continue to push them in years to come. Investors appear to be realising how much money these companies stand to make out of their uranium projects at current U3O8 prices, let alone how much they will be worth in the years to come as uranium prices head towards our target of $200/lb.

Please remember that this will not be a smooth ride by any means as this is a small and highly volatile sector, as proven in the last month alone! However we think that it is a good idea to buy on dips such as this one and hold out through the storms, patience and resilience will pay off big time in the years to come. Buying on drops such as this one is the best way to make serious money as this uranium bull market continues. To stay updated on the uranium market and uranium stocks, please subscribe to The Uranium Stocks Newsletter completely FREE of charge. Just click here and enter your email address to subscribe.

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Reader Comments (1)

I can't see how any new or in this case resurging industry can thrive when the economic climate is poor and, therefore, my guess is that the recent surge in the uranium shares is due to the perception that the economic landscape is more favorable than recently thought. Plus, it doesn't hurt to have the vast majority of the GOP candidates espousing nuclear power (although I'm not sure how the dems. view this power source except for Hillary who claims to be an agnostic-the politcal winds are apparently not blowing in the right direction for her at this point.)

January 25, 2008 | Unregistered CommenterMark

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