Stock price when the opinion was issued
It wouldn’t surprise him if there was a 2 year wait for a price change in uranium. This is an extraordinarily exciting exploration play with uranium grades, outside of Cameco (CCO-T), which the world has never seen before. Failed in an attempt to merge with Denison Mines (DML-T), probably giving some disappointment in the stock in the near term. Good exploration news or a resumption of some sort of amalgamation in the uranium space, could give you some near-term joy.
Always amazed with this company because they have such a following. The share count has skyrocketed over the last 4 years. Just had an investment from a Chinese company for $82 million, to take about 20% of the company. It could be years down the road before they have this developed and producing. He doesn’t buy into anything that doesn’t have revenues, unless he is very convinced it will do so in the next 6 months or so. Uranium is probably undervalued, and nuclear plants are coming back into style. Prefers GSE Systems (GVP-A), a great company with no debt and good management.
The Hinckley Point reactor in Great Britain is going to go ahead. Also, there is a report that China, by the year 2020, will have as many reactors built as there are in the US. This is why he is bullish longer-term. With the slowdown in the last few years, the inventory has built up and the buyers are utilities or governments, which are very slow moving. Transition might be a little slower, but he does believe in this longer-term. He likes this.
Sold his uranium stock last year. It looks like the market is fairly well balanced, such that he doesn’t see a turn around anytime soon, because there is still such a big overhang in the inventory. The way to play this would not be with production, and potentially not with near-term development, but more with exploration. He is not playing anything in uranium right now.
They were trying to merge with DML-T. It was beaten down. There is expectation for FCU-T to be taken over by a larger company and the merger was not for enough premium to the stock price. They have a strong management team and balance sheet. He likes it, but the price of Uranium is not a short term issue. He expects a recovery in 2-7 years. He has half a position.