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« Uranium Stocks: Still in the Dog Box! | Main | Uranium stocks: The beating continues! »

Uranium One Incorporated: A Damaging Strike

UUU Chart 16oct08

As if things were not tough enough Uranium One now have to wrestle with unions as workers have gone on strike at their Dominion Mine in South Africa. The mine was shut down about a week ago as management/worker relationships worsened.

Raymond James analyst Bart Jaworski had this to say:

"We expect the strike may be protracted, adding that the labor upheaval could allow the company to declare 'force majeure' on the unproduced portion of contracted deliveries this year.

This is a kick in teeth for the investors who must be wondering just what else can go wrong, as this stock has fallen heavily to close yesterday at $0.89. We do feel for the investors as we are in a similar position with some of our stocks.

As investors these situations raise the question of ‘Is this the buying opportunity of a lifetime or will it get worse’. Well, uranium is still drifting lower and the dash for cash appears to be intact despite the trillion dollar financial injection into the markets so the ‘bottom’ has yet to make an appearance. We’ll wait and watch and look for signs that this tiny market sector has turned north before we deploy any more cash. However, when the price of uranium stabilises and begins its next rally these uranium stocks will rocket and it’s a rocket that will bring considerable relief to most of us.

Uranium One Incorporated trades on the Toronto Stock Exchange under the symbol of UUU, has a market capitalisation of $416.93 million with 468 million shares outstanding.

The above chart is a sorry sight as we can see.

Try and have a good one.

Got any comments? Fire them in!

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Reader Comments (2)

Bottom fishing in this environment is dangerous to say the least as recent dead-cat bounce is showing. There will be some excellant Uranium stocks to be had at bargain prices in the next 12 months but what indicators may help to determine a true bottom -rather than just a sell-into rally?

I've read that in 1933 when the market truely hit rock bottom (after a punishing 90% DJI fall) the level of stock trading was very very low. Everyone who could/wanted to sell had and people where so pig-sick of stocks -after losing their shirts- that they wanted nothing to do with them. Now, compare this with the current "VIX" volatility index -which is off the charts...

Another indicator is the Baltic Dry Index which gives an idea of the amount of commodities/goods transported around the world -its dropping off a cliff...

The LIBOR interbank lending rate is another -hardly budged from last week. Banks are hoarding any cash injections and not passing them on.

So my formula for when to get back in is partly:

BUY = (VIX=Much Lower) + (BDI=Stable) + (LIBOR=Falling)

Then, look for stocks where the assets are near or -better still- lower than the NetAssetValue (showing that the market has miss-priced them) and you are possibly onto a future winner. Until then 'shirts will be lost'...

Happy stock hunting Uranium Gurus!


October 16, 2008 | Unregistered CommenterNick

i believe you have a proper outlook on the situation and a possible turning point. the human species is more or less optimistic; and in this regard very dangerous for stock market advocates at this time...every monday morning you expect the P.T.B. to have lifted all boats and the swim to riches has begun anew. alas, by thursday more pain! this could last longer and be deeper than anyone can imagine! glta...

November 2, 2008 | Unregistered Commenterrichard mruz

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