NYSE Trade Idea: UEC

5/15/17

Good Morning!

We are continuing to monitor UEC, our newest trade opportunity from Friday.

Following our alert UEC traded on average around 1.46 and closed the day at the high of day of 1.54 for upside of 5%, a potentially extremely bullish indicator.

As a reminder, not only is UEC itself potentially undervalued relative to highs it has already achieved in 2017 of 1.92, upside of 25% from Friday’s close, but it is our belief that the Uranium industry has the potential to provide long-term investors with a significant catalyst for upside.

There are only a handful of quality publicly traded uranium companies.

If the price of uranium continues its upsurge from late 2016 this could create significant leveraged gains for investors of UEC, a U.S.-based uranium mining and exploration company being a potentially  perfect vehicle for this.

For your convenience, below is our newsletter from Friday:

 


5/12/17

 

Today I would like to bring to your attention a new trade idea, one that I believe offers potentially an undervalued technical setup, but also may be positioned within an undervalued industry.

Trade Idea: Uranium Energy Corp. (NYSE: UEC)

Technical Highlights [1]:

  • Last Close: 1.46
    • You need to evaluate the chart in real-time and establish for yourself whether it is an appropriate trade opportunity for you or not.​​​​​​​
  • Some of you may recall that we have alerted UEC previously, when the company was trading at only 1.00. In fact since our last alert of UEC on December 13, 2016 the company has rallied to a high of 1.92 on February 14 for upside of more than 92% in 2 months.
  • Since hitting the high of 1.92 UEC has been consolidating in line with its moving averages for the past few months.
  • Just this week, UEC tested and appears to have confirmed its 200 day moving average of 1.19, a potentially significant technical indicator.
  • Not only that, but following a rebound above the 200 day moving average, UEC has rallied above both its 20 and 50 day moving averages, a potentially significant bullish indicator.
  • UEC reached a high of day yesterday of 1.48 and closed the day at 1.46, near the high, a potentially positive technical indicator.
  • When evaluating a monthly chart, a break above and sustaining of the 1.46 level could be extremely bullish, and could present you with increased upside potential.
  • UEC has a history of providing investors with potentially significant upside, as indicated by the company’s historical trading.
  • In addition, UEC has released significant news earlier this week that could continue to provide investors with upside opportunity, which may be currently overlooked by Wall Street.

Company Highlights:

  • “[UEC] Uranium Energy Corp is a U.S.-based uranium mining and exploration company.” [4]
  • “The Company’s fully-licensed Hobson Processing Facility is central to all of its projects in South Texas, including the Palangana ISR mine, the permitted Goliad ISR project and the development-stage Burke Hollow ISR project.” [4]
  • “Additionally, the Company controls a pipeline of advanced-stage projects in Arizona , Colorado and Paraguay.”[4]
  • “The Company’s operations are managed by professionals with a recognized profile for excellence in their industry, a profile based on many decades of hands-on experience in the key facets of uranium exploration, development and mining.” [4]
  • Amir Adnani “is a founder of Uranium Energy Corp and has been the President, Chief Executive Officer, and a director of the Company since its inception in January 2005. Fortune magazine distinguishes Mr. Adnani on their ‘40 Under 40, Ones to Watch’ list of North American executives.”[2]
  • Spencer Abraham, Chairman of the Board, “served as the 10th U.S. secretary of energy from 2001 to 2005. Under his leadership the department made major advances in the development of new energy technologies, successfully implemented a variety of nuclear non proliferation and nuclear security programs.”[2]

Industry Highlights:

  • When the momentum in the Uranium sector shifts, it often does so with extreme volatility.
  • The price of uranium, unlike other commodities, does not trade on public markets, as such, buyers and sellers negotiate contracts privately. While this data is delayed, as reported by Ux Consulting Co. and TradeTech it appears we may have reached a potential inflection point in the past few months. [3]
  • For more than 5 years the price of Uranium has largely been in a progressive decline, what can otherwise be construed as a bear market.
  • Currently, the price is quoted at around $22.50/lb as of early May. In the last bull market, prices rallied from under $10 to more than $135/lb, upside of 1,250%. [3]
  • If you are looking for a potentially longer-term trade idea, and are ready to ride the ups and downs, uranium may very well present an undervalued investment opportunity, with UEC as potentially a perfect vehicle to achieve leveraged gains to the price of the commodity itself.

Recent News [4]:

May 9th: Uranium Energy Corp Strengthens Leading ISR Portfolio with Acquisition of Fully Licensed Reno Creek Project 

CORPUS CHRISTI, TX , May 9, 2017 /CNW/ – Uranium Energy Corp (NYSE MKT: UEC, the “Company” or “UEC”) is pleased to announce that the Company has entered into a definitive Share Purchase Agreement (the “Agreement”) with Pacific Road Resources Funds (“PRRF”) to acquire all of the issued and outstanding shares of Reno Creek Holdings Inc. (“RCHI”) and, indirectly thereby, 100% of its fully permitted Reno Creek in-situ recovery (“ISR”) project located in the Powder River Basin, Wyoming (“Reno Creek” or the “Project”).

Transaction Highlights

  • Strengthens UEC’s pipeline of low-cost ISR uranium projects with the addition of Reno Creek, located in the prolific Powder River Basin in Wyoming .
  • Reno Creek hosts an NI 43-101 Measured and Indicated resource of 27.47 million tons grading 0.041% U3O8 yielding 21.98 million lbs U3O8 at a grade-thickness (GT) cutoff of 0.20*.
  • The NI 43-101 resource report also indicates potential to expand the resource with additional drilling.
  • A Source and By Product Materials License for Reno Creek was issued in February 2017 from the U.S Nuclear Regulatory Commission (“NRC”), supported by a Final Environmental Impact Statement and Record of Decision, to permit production of up to 2 million lbs. U3O8 per year.
  • Strategically located within the Powder River Basin in Wyoming , a uranium mining-friendly state with excellent infrastructure and an experienced labor force.
  • A Pre-Feasibility Study (“PFS”)** on Reno Creek completed in 2014 demonstrated strong project economics with low capital and operating costs consistent with ISR projects in Wyoming . A new and optimized PFS is in progress and will be completed by UEC.
  • Cumulative expenditures to date of approximately $60 million .
  • A new partnership with respected mining private equity firm Pacific Road Resources Funds, who will own approximately 9% of UEC’s common shares at closing.

Amir Adnani, President & CEO, stated:

The acquisition of Reno Creek creates an industry-leading diversified pipeline of low-cost ISR uranium projects when combined with our production-ready South Texas hub-and-spoke operations and exploration/development portfolio in Paraguay.  The Reno Creek Project presents a rare opportunity to acquire a large, fully permitted, construction ready, and strategic low-cost ISR asset located in the United States – a complete set of attributes for any potential UEC acquisition.  The Powder River Basin of Wyoming has produced over 85 million lbs U3O8 historically, and is currently home to two of the largest uranium producers in the world: Cameco and Uranium One (Rosatom). We commend Pacific Road for their outstanding work to advance the Reno Creek project over the past seven years, and we welcome them as our newest shareholder.”

“We are very excited about combining Reno Creek with UEC”, said Dan Wilton , Partner at Pacific Road. “The UEC team has an outstanding track record of consolidating, developing and operating ISR uranium projects. We believe they have the right technical, operating and financing capabilities to deliver the true value of Reno Creek, continuing the excellent work done by Jim Viellenave’s team, who took the property from an initial resource through to a fully permitted project. The combination of UEC and Reno Creek creates one of the most attractive portfolios of U.S.-based low cost ISR uranium assets and is an important step in the consolidation of the U.S. ISR uranium sector.”​​​​​​​

 

[1] https://finance.yahoo.com/quote/UEC

[2] www.uraniumenergy.com/

[3] https://www.uxc.com/p/prices/UxCPrices.aspx

[4] finance.yahoo.com/news/uranium-energy-corp-strengthens-leading-110000174.html

 

If you are not familiar with my trading guidelines, please read them below. These trading guidelines are designed to give you a starting point to develop your own personal trading philosophy and approach.

Since every traders/investors circumstance is different, make sure you create a personalized approach that works for you and always consult a financial adviser (not me).

Happy Trading!

Ultimate Stock Alerts 

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Trading Rules [Please Review Before Taking Any Action]:

  1. Do not invest more than you are willing to lose. No one likes to consider the worst case, but it’s always a risk that exists. Rule of thumb – if you cannot sleep at night as a consequence of your investment, then you have over invested.
  2. Keep calm. Do not chase. Decide for yourself if you like the trade. If you are not comfortable with the perceived risks, stay out. Timelines are to be decided by you. Approach methodically, and seek technical confirmation for direction. Always trade with a strategy in mind.
  3. Never use market orders. Only use buy and sell limit orders. Protecting your investment is more important than missing gains. Use “trailing stop %” or “trailing stop limit” orders. Personally I prefer mental stops while actively managing trades rather than entering your stop into your brokerage account.
  4. Cut losses quickly when day/swing trading. It’s better to acknowledge being wrong than to have false hope. Sometimes you will be wrong in doing so, often times it will save you. It all depends on your entry.
  5. Actively manage all your investments & trade during market hours only. Trading during pre/post market hours carries greater volatility/risk.

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