Uranium Miners Analyst Watch: October Edition

by: Itinerant

Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.

We have been monitoring analyst data published on Yahoo.com for some time now, and have been reporting our observations on a monthly basis. This article provides an update for uranium mining companies for the month of October and will compare present data with the data reported in our September edition. We hope that our observations provide yet another data point supporting investment decisions of our readers.

Most companies mentioned in this article have more analysts following their progress than considered in our database. This article only considers analyst reports available through Yahoo.com and not all analysts are providing their data free of charge on this platform.

As in previous articles in this series, we have considered the following companies in alphabetical order for this update: Cameco (NYSE:CCJ), Denison Mines (NYSEMKT:DNN), Uranerz (NYSEMKT:URZ), Uranium Energy (NYSEMKT:UEC), Uranium Resources (NASDAQ:URRE) and UR-Energy (NYSEMKT:URG). For the present article, we are adding Energy Fuels (EFRFF.PK), Fission Uranium (OTCQX:FCUUF) and UEX Corp (OTCPK:UEXCF). Price targets for the latter three companies are given in Canadian Dollars and we used a conversion rate of 0.97 for this report.

Our data for these stocks is summarized in the table below. The first three columns list the company names, ticker symbols and share prices 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 recommendations 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 differences between the share price and the median price targets. The column titled "high-low" gives the difference between the high and the low targets. The last four columns titled "target change" document the changes in price targets since the September report with the last columns giving the average changes over the low, median and high price targets.

Note: At present there is only data from one single analyst available on Yahoo.com for Uranium Resources and Fission Uranium respectively.

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.

Both analysts following UEX Corp give price targets in excess of double the current share price. From the group of companies considered for this article, UEX Corp clearly seems to be considered the company with the greatest potential, followed by Uranerz and Energy Fuels. Fission Uranium on the other hand is trading very close to the median target.

The results from column "high-low" in the table above are visualized in the next diagram. They can be interpreted as a measure for divergence in analyst opinion. For Fission Uranium and Uranium Resources, targets from only one analyst were available.

Analysts following UEX Corp are both bullish on the company, but seem to value the potential very differently. Uranerz comes second in this ranking closely followed by Denison Mines, UR-Energy and Cameco. Analysts are displaying the greatest degree of agreement in price targets for Uranium Energy.

On average, price targets have been increased by 2.93% with Denison Mines leading the pack. Uranerz' price targets have been cut presumably reflecting the recent capital raise. For the three newly introduced companies, no changes are registered due to lack of data for last month. Price target changes are shown in column "target change average" and the diagram below.

Unchanged from last month, UR-Energy and Uranerz are seen most favorably by analysts at present in terms of buy recommendations as documented in column "Recommendation" and the diagram below. Cameco and Uranerz have suffered a small increase in analyst recommendations indicated by the small red bars which represent a new feature in our monthly reporting.

Our pick of the month

UEX Corp is a new introduction to our data base and seems to enjoy coverage from two very bullish analysts. We recommend further research and attention to this high risk/reward small-cap exploration play in the Athabasca basin.

Before we finish, we would also like to draw attention to the recent drop in Cameco's share price following the announcement of further delays at the Cigar Lake mine. We believe that Cameco's share price is setting up for another test of support at $16.60 and will keep a watchful eye in hope for an advantageous entry 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.