Sunday, February 24, 2008 at 12:07AM
This chart is courtesy of www.U308.biz.
It comes as a welcome relief to see the uranium stocks sector reverse the downward trend and stage a mini rally. Throughout this period of carnage which saw stocks losing 50% plus of their value it has been hard to hold on to theses stocks. Wrongly or rightly we decided to grin and bear it and not sell any of our stocks and subsequently register the associated loses. Our portfolio is battered and pales in comparison to our gold and silver portfolios. However we still believe in the nuclear future with the fundamental criteria for uranium being little changed. We could well look back on this period as the buying opportunity of a lifetime even though a victory looks improbable when you are on the ropes.
Going forward we have no doubt that there are financial skeletons in the cupboard yet to make their début with the fallout effecting most sectors, although it should not come as such a shock this time. Again we reiterate that it is difficult to see much in the way of downside for uranium stocks as the worst looks to be over. As we have reported recently, many of the uranium stocks have bottomed and some have put in spectacular spurts of 20% plus in a day. Also note the increased volume of shares traded and take a look at your favourite stocks to ascertain if they are experiencing similar increases in trading activity.
In view of the renewed interest in uranium stocks we are relaxing our previous stance of 'hold' and recommending just a few stocks as 'buys' with the view to acquiring these stocks gradually.
Cameco Corporation – Watch
Cameco was trading at $35.30 when we last updated the portfolio and closed at $36.94 on on Friday. Volume has fallen recently which is not a good sign as stocks don't usually rise on reducing volume
RPT Uranium Corporation – Hold.
We bought RPT on the 19th February 2007 for $0.42 and sold it for $0.62 on the 13th June 2007 for a profit of 47.6% in 4 months. We still like this stock and so bought it back at around 50 cents, however RPT closed at $0.17 on Friday, however it does appear to be trying to form a bottom with support at $0.16
Uranium Participation Limited – Hold
U is trading at C$10.60 having been as low as $9.00 recently, so we are pleased to some progress with this stock. We bought at $11.97 on 21 November 2006 so U is still showing a small paper loss but we will continue to hold, as it offers direct exposure to uranium without the risks inherent in mining.
Strateco Resources Incorporated – Hold
We made a small investment in RSC at $2.30 and it recently traded at $2.87, however it closed at $2.22 on Friday so we are back to square one.
Crosshair Exploration and Mining Corporation – Neutral.
Having taken a small profit we continue to watch CXX. The stock was trading at about $1.76 last month but has fallen back to close on Friday at $1.46. Judging from our mail bag Crosshair has a fair number of admirers who may start accumulating again, wait and see.
Laramide Resources Limited – Buy
This stock was trading for about $4.22 last month and closed on Friday at $5.00, we bought at $5.78 on the 28 July 2006 so we are pleased that Laramide is heading in the right direction. When we were sitting on a paper profit of around 80% we sold half in order to buy other uranium stocks, as we needed a bigger spread of stocks, lets hope those days return.
Mega Uranium Limited – Buy
We bought MEGA at around $4.0 on 27 July 2006. MGA was trading at $2.25 last month but has improved considerably to close at $3.32 on Friday. Mega has the potential to move upwards very quickly.
Santoy Resources Limited – Dropped from list
However having decided to sell three of its projects to Mega for 400,000 common shares in Mega we decided to sell. We sold on 23 April 2007 at $1.39 for a profit of 70% in 4 months. Santoy now trades at $0.40. This stock is not for us at the moment as they now have limited uranium exposure so we are dropping Santoy from our list.
Khan Resources Ltd - Hold
We bought Khan on the 5th March at $3.63 and it dropped to $1.33 due to licensing issues with the Mongolian regulators. So, in anticipation of Khans management team finding a resolution to this problem we decided to buy again. (See Khan Resources: A speculative buy) the stock rallied and we took a profit of 15% in a matter of days before the stock fell back. Khan closed at $1.28 last month but jumped recently to close at $1.73 on Friday.
Aurora Energy Resources - Hold
We bought Aurora on the 5th March 2007 at $14.17 and it is now trading at $9.46 having been as low as $8.00, but the company does have a great project in the Central Mineral Belt and when uranium prices start ticking up again, so should Aurora.
Strathmore Mineral Corporation - Hold
We bought STM on the 14th April 2007 at $4.96 and it is currently trading at $2.00, which is a very disappointing performance indeed. STM needs to join in the current resurgence in uranium stocks and prove to us that it is worth holding.
Ur-Energy - Hold
We bought Ur-Energy on the 23rd April 2007 at $4.75 and we also gave a second buy signal on the 24th August 2007 when we acquired more stock at $3.03. URE closed on Friday at $2.29, having traded below $2.00. Ur-Energy is showing signs of a recovery but we would like to see the volume increase.
We will not report on the following stocks in future:
Fronteer has been transferred to our gold investment account and will not be covered here in future.
UraMin Incorporated – gone to that big AREVA in the sky!
Santoy, not enough uranium content.
We may be adding other uranium stocks to the watch list such as Denison Mines (we do not hold this stock at the moment.)
If you have any comments or suggestions then please feel free to add them to this article whether you agree with us or not.
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