Uranium Miners Analyst Watch: August Edition

by: Itinerant

We have been keeping tabs on analysts' price targets and sales recommendations on uranium mining and development companies provided by Yahoo.com. This article reports on our data at the beginning of August and gives some comparison to the data reported on in our June edition of our series of articles.

In response to some comments we have received we would like to note that many companies mentioned in this article may have more analysts following their progress than considered in the presented data. Unfortunately, not all analysts provide their targets to Yahoo.com which is the source of the base data for this article.

As in the previous offering we have considered the following companies in alphabetical order: Cameco (NYSE:CCJ), Denison Mines (NYSEMKT:DNN), Uranerz (NYSEMKT:URZ), Uranium Energy (NYSEMKT:UEC), Uranium Resources (NASDAQ:URRE) and Ur-Energy (NYSEMKT:URG).

Our data for these stocks are summarized in the table below. The first three columns list the company name, ticker symbol and share price at the time of writing. Price targets (low, median and high) are listed in the following three columns. These targets are followed by a column giving the number of analysts providing data to Yahoo.com and the mean recommendation given by these analysts ranging from 1.0 (strong buy) to 5.0 (sell). This concludes the data sourced directly from Yahoo.com.

The following columns are colored in light green and contain data derived from our source data. These data points are given in percentages related to the share price at the time of writing. The column titled "median-price" gives the difference between the share price and the median target price. The column titled "high-low" gives the difference between the high and the low target. The last four columns titled "target change" document the changes in price targets since the June report with the last columns giving the average change over the low, median and high price targets.

Note: At present there are only data from one single analyst available on Yahoo.com for Uranium Resources.

The difference between the current share price and the median price target is listed in column "median-price." Under normal circumstances we would view a large value in this column as an indicator for the potential of disproportionate gains over the coming year. However, we advise caution since the value in this column can also be influenced by catalysts moving the share price and analysts not having caught up with the event just yet.

Uranerz leads this category at the moment. The share price would need to rise by almost 100% in order to reach the median price target, whereas Dennison Mines and Uranium Resources are trading very close to the median price target.

Divergence in analyst opinion is measured in column "high-low." The results from this column in the table above are visualized in the next diagram. Not surprisingly the two near-term producers Uranerz and Ur-Energy have the highest values in this category with execution risk presumably on the mind of analysts for these two stocks.

The change in targets during the past two months is shown in column "target change average" and the diagram below. On average changes have been cut by a modest 5%. Dennison Mines has seen price targets increase, whereas Uranerz has seen the greatest cuts.

Uranerz and Ur-Energy are seen most favorably by analysts at present in terms of buy recommendations as documented in column "Recommendation" and the diagram below.

Our pick of the month

Rather than picking an individual stock we would like to pick uranium miners in general. Uranium mining stocks have held up exceedingly well recently despite another significant drop in the uranium spot price during the past month. Analysts don't seem to be phased too much by the dropping price of the underlying commodity which we view as another bullish data point.

Disclosure: I am long URZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.