It looks like the pain continues for Energy Fuels (UUUU), which is down another 5% this morning, currently trading at $1.90/share.
Most recently, I purchased another batch of 1,500 shares at $2.05/share. How much more downside remains?
Who knows…
But I did hear back from management this morning and they had this to say regarding the selloff:
- There is no discernible reason for the large decline in share price.
- The company issued a press release to confirm no material change.
- No large institutions are selling at this time.
- Large retail investors from NY are liquidating substantial positions.
- The Uranium Global X Funds ETF (URA) has been getting some redemptions and might possibly still be overweight in their UUUU allocation.
- Tax-loss selling has commenced and this is a likely contributing factor driving prices lower.
- The ENTIRE uranium sector is experiencing a decline to some degree at this time.
Lastly, the company re-affirmed their belief that results from their Q3 earnings report were positive. As far as Energy Fuels is concerned, they are executing their plan accordingly and it’s business as usual, in spite of the massive share price decline.
So, please take this news for what it’s worth… Investing is tricky (and risky) business, so please do your own due diligence before forming any definite conclusions!
There are no guarantees!
As I mentioned in the last post, I feel like I’m sufficiently allocated in my uranium holdings at this time, so I am not planning on making any additional moves. However, if the selloff in UUUU continues, I will have to periodically re-assess the situation and consider adding more shares.
I am using UUUU as my “non-expiring call option” on the future rebound in uranium prices… And in my humble opinion, the shares are immensely attractive at these low prices!
Happy Hunting!
As long as oil and NAT gas is cheap, there is no reason to use nuclear power. You will need some uranium to power existing reactors, but not as much new demand.
Iran is creating new reactors, but that is an entirely new debate…
Once the economy starts to get powered up, more fuel will be needed.
Eric, 20% of electricity production in the U.S. comes from nuclear alone… Yet we only produce 2% of the world’s supply and are the largest consumer of nuclear fuel… 30%+ of U3O8 production comes from Kazakhstan alone… and these days they are selling a lot more to China… I don’t think anyone would peg Kazakhstan as the most reliable long-term source for supply… There is a lot of interest in renewables these days, but to realistically supply the base load requirements we need, those green sources are not as reliable (wind and solar are intermittent); nuclear is 24/7 and also… Read more »
I have been researching this company and outlook of Uranium in general and I am getting very interested and put it in my watch list. Will give a read on their financial statements now. Thanks for sharing! We may be a fellow shareholder on this one. 🙂
Cheers!
BSR
BSR,
You bet! When it comes down to it, there really aren’t that many choices of producers in the U space. With that said, I really like the valuation of UUUU right now and think it’s one of the best producers out there.
All the best!
I was wondering if you have any thoughts on what will happen to mining shares if gold does drop to 850. There has been nice support of hui at 100 level. I have been looking at ngd, 1 of Pierre lassondes companies, any interest? I have also been adding in to mux, aem, and ag. If silver drops below 10 I would consider call option on silver Wheaton. Your blog has sparked by interest in first finance. Re uranium companies I like the idea. I would think that these junior companies will explode at some point. Probably uranium prices will… Read more »
Sean, Thanks for the comment. If gold hits $850/oz, no doubt the mining stocks will continue to get punished… Could that happen? Sure, anything is possible… From my own experience, when gold hit below $1,100/oz, the demand for physical went soaring and the local bullion shop I frequent had trouble keeping up; the phones were ringing off the hook. I can’t imagine what things would be like at $850/oz… For a prolonged slump in that range, hardly any miners (probably none unless the USD also went hyperbolic and oil fell to $20/barrel to offset operating costs) would be profitable, and… Read more »
At any rate, the business looks to be stable and growing,
and long-term investors could make out big if they’re patient,
and willing to ride out the ups and downs.