Stockchase Opinions

Andrew Cook Mega Uranium MGA-T PAST TOP PICK Jul 27, 2010

(Top Pick Aug 20/09, Down 50%) They are not in production. Price of uranium was quite weak until a couple of weeks ago.
$0.530

Stock price when the opinion was issued

non-base metal mining
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DON'T BUY
Capital is going to be harder and harder to come by for many of the junior and emerging producers. Have some production but is more of a growth and resource story. Would stay away. From an energy need perspective, you are going to see a shift towards thermal coal, natural gas, etc.
BUY
Uranium development story in Western Australia. As they move towards production, there will be feasibility studies and financing, which should give a lift in the stock. Uranium is out of favour at the moment but risk/reward is pretty good at this juncture.
DON'T BUY

He is a uranium bull and if the uranium price increases the tide will float all ships, but he would not own this. He believes uranium has to go up at some point because it currently costs more to produce than it sells for, however it likely won’t go up in 2015.

COMMENT

Believes it is going to take a couple of years to resolve the uranium market. If he were going into uranium, his choice would be Uranium Participation (U-T). Mega Uranium will do well in an upturn in the uranium market.

COMMENT

Very junior, although it has been around for a long time. It is basically a lot of hype and hope. They are doing some work in Australia, and virtually have no money. Nothing found to date has been feasible, that they can push it forward in a big way. He avoids companies like this like the plague. Doesn’t like companies that have no revenue.

TOP PICK

Attractive to Uranium space at this time.
Current share price less than half of securities holdings in other Uranium companies.
Good time to buy shares.
NPV of portfolio and assets very discounted on a per share basis.

BUY

Attracted to the valuation and off-the-radar speculation. Whole sector is moving up and will continue to. Trades at a substantial discount to NAV. Successful management team. Likes the range of assets. 

PAST TOP PICK
(A Top Pick Jul 14/23, Up 49%)

Functions almost as a closed end fund. Recent high prices have fallen, but will continue to hold. Value of parts of company exceeds the whole of the company. 

BUY

Fairly substantial discount to market cap of its portfolio, and you get the company's own asset base for free. He's a really big fan of free. Yes, this is a way to buy NXE cheaper.

Price of uranium doesn't really need to go up, as it's above the incentive price. What's really changed in uranium is that it's gone from a spot market to a term market. Producers will now be able to sign agreements without being slaves to the spot market.

BUY

Loves the uranium space because stocks are down by 50% -- that's called a sale ;)  Long-term outlook for uranium is good, but people are bored with it. A sum-of-the-parts play. Stock is at a substantial discount to liquidation value, and he loves that.