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Uranium Stock Uranerz: On Fire, With More Upside Expected

Motley Fool basically thinks URZ is "junk" when looking at the company, its fundamentals and management. I'm curious to know why URZ's management didnt respond to Motley Fool's damaging article... as follows

most toxic-looking are based in Canada and trade on the AMEX.

Uranerz Energy (AMEX: URZ) is perhaps the most baffling of these. This stock has quadrupled over the past year, yet this is a company with $0 (that's zero, zilch, nada) revenues. What it's got going for it is various claims for uranium properties in various locations across the globe -- often acquired for such negligible amounts that you have to wonder just how promising they are.

And even the Uranerz filings note that it has never earned revenues and can't be assured of getting any of its claims (in places like Mongolia, for instance) to the operational stage.

The filings also note that there's enormous lead time to get any of these claims up and running -- if they should prove economical -- and that the company lacks the money to bring them to the commercial stage. The latest Q3 10QSB even raised doubt as to whether the company can even continue as a going concern.

So, no revenues. Burning cash. Why on earth is this stock rising?

Who knows? I suspect much of it has to do with self-promotion. It's pretty frequent with the PR, and this is the keynote on the company's website: "Uranerz Energy Corporation is the only pure-play uranium company listed on the American Stock Exchange (symbol URZ)."

But I suggest investors treat it as if it's radioactive.

In cases like this, where we can count on no revenues or profits, and are basically asked to trust management to make good things happen in the future, I find it especially instructive to look into the past. What's the track record for other publicly traded companies in the histories of management and directors? In the case of Uranerz, investors have more to fear.

According to the filings, Uranerz's chairman, Dennis Higgs, is the CFO at Miranda Gold, a company that (according to my information from Capital IQ) has not earned any revenue since at least 1999. (Several other members of Uranez's advisory board are also Miranda Gold alums.)

The resumes of other managers and directors include stocks such as Asia Payment Systems, Manaris, China World Trade, and Lincoln Gold Corp.

If that's not enough to give you second thoughts, dig deeper. The filings (check out page F-11 in the recent 10-QSB) reveal a nest of related-party transactions that ensure that managers and directors get plenty of company business (via consulting fees and other deals) while investors foot the bill.

Of course, none of this is proof that Uranerz can't succeed, but I have to believe that if the future were as bright as market action implies, managers and directors wouldn't be shedding shares at the pace they have been over the past couple of months.