Opinions
Michael Giordano
Uranium One Inc.
UUU-T
BUY
Dec 28, 2012
Stock price when the opinion was issued
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It is finally starting to show some very interesting technicals. A nice little reversal pattern after a double bottom and a break out. Uranium went up 10% a couple of weeks ago. Seasonality is from mid-December through until May. A lot of uranium contracts are signed during this time.
By and large, uranium stocks are cheap but so is the pricing of yellowcake. Stocks had been slipping before the Russians stepped in to acquire this company. He would find the area at this point more speculative but can’t help but think that for the long-term outlook for uranium has got to be good.
Gives you a 5%-6% annualized return. Given the risks involved, he doesn’t own. If the arbitrage spread gets a little wider, he thinks it would be an interesting situation. Thinks they will get all the regulatory approval for the Russian takeover but it is hard to get a sense of the perfect timing for this transaction.
Looks like it was acquired. Looks at URA-N for Uranium. Cheapest most efficient way to get energy. Hundreds of reactors in the pipeline to be built over the next number of years. Maybe, there is a bottom forming. With a 10 year window this sector is extremely attractive but a lot of volatility until then. Half position at most.
(A Top Pick Nov 28/12. Up 8.9%.) 5% bond maturing March 13/15. This company was taken over by its parent, so the takeout price didn’t actually give much of an upside kicker to the convert but at the time he was looking at the company which had a decent balance sheet, very easily able to cover its interest costs and looked relatively cheap.
Likes this company. Outlook for uranium is pretty good and these guys are the top producers out of Kazakhstan, probably the 3rd largest producer globally. Demand for uranium is slowly starting to come back. Supply is tight.