Editors' Note: This article covers one or more micro-cap stocks. Please be aware of the risks associated with these stocks.
As always at the start of a new month, and for the last time in this calendar year, we would like to present our update on analyst price targets for uranium mining companies. The present December edition will summarize our most recent data and make comparisons with targets and recommendations reported a month ago in our November edition.
Most companies mentioned in this article have more analysts following their progress than considered in our database. This difference is due to the fact that not all analysts release their predictions to Yahoo.com. 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), Energy Fuels (NYSEMKT:UUUU), Fission Uranium (OTCQX:FCUUF), UEX Corp (OTCPK:UEXCF), Uranerz (NYSEMKT:URZ), Uranium Energy (NYSEMKT:UEC), Uranium Resources (NASDAQ:URRE) and Ur-Energy (NYSEMKT:URG).
Price targets for Energy Fuels, Fission Uranium and UEX Corp are given in Canadian Dollars and we used a conversion rate of 0.94 for this report. Energy Fuels has completed its 1-for-50 reverse split and has listed on the NYSE proper. Our data has been updated accordingly.
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 November 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, Fission Uranium and UEX Corp.
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.
Price targets for Energy Fuels indicate the greatest potential by quite some margin. Fission Uranium and Cameco on the other hand are trading the closest to the respective median price targets.
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. Note that for Fission Uranium, Uranium Resources and UEX Corp targets from only one analyst were available and no measure for this category could be computed.
Targets for Uranerz are the most divergent. We would expect this spread in targets to close again in the near future due to Uranerz finally receiving the $20M Wyoming State Loan.
Energy Fuels also seems to divide analysts followed by Dennison Mines. Cameco is the only senior producer in the mix and as could be expected price targets for this company are much better aligned.
On average price targets have decreased by -45.5% during the past month. This number is skewed due to UEX Corp dropping one analyst and mean price targets dropping disproportionately as a result. When UEX Corp is considered an outlier and not included then targets were cut by -18.6%.
Energy Fuel suffered a significant price cut to the high target probably also due to a reduction in analyst opinions provided on Yahoo.com.
All other companies remained close to last month's price targets with Cameco being the only company receiving a slight increase.
Unchanged from last month Ur-Energy is seen most favorably by analysts at present in terms of buy recommendations as documented in column "Recommendation" and the diagram below, followed by Uranerz and Fission Uranium. Analysts continue to be skeptical about Denison Mines which receives a recommendation rating of only 2.3.
Last month we drew our readers' attention to a pattern in Cameco's chart. At the time we interpreted this pattern as a continuation triangle that had broken to the down side. We duly admit that our interpretation was incorrect and Cameco is currently trading at healthy levels right within the trading range that has become typical in recent months. Apologies and kudos to readers who have picked up on this fact in the comment section of last month's article.
This concludes our series for this year. Best wishes to our readers from your humble scribe. Let us all observe markets again in 2014 and be ready when uranium goes on the long-anticipated bull run again.
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.