All ords and uranium companies - time to buy?

Those into shares, who is looking at buying right now?

Paladin for example is off 40% over just a few days. Thoughts?
 
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There are some excellent buys right now well below their intrinsic value. Nothing like some 'negative sentiment' to provide good discounts on businesses which have no fear of suffering from economic repercussions of the Tsunami, Middle East kerfuffle etc.

Thank God for D&G'ers, make life a lot easier.
 
Why would you buy Uranium right now? Clearly there is world sentiment against using nuclear power...I would be buying coal companeis if anything
 
Why would you buy Uranium right now?

Why not? The U3O8 market is undersupplied. The only reason there has not been shortages 'till now is because the Russians have been selling weapon's grade uranium from their nuclear arsenal. That is about to come to an end.


16 March 2011



Company Announcements Office
Australian Securities Exchange
20 Bridge Street
SYDNEY NSW 2000
By Electronic Lodgement


Dear Sir/Madam

Paladin Statement on Japan Nuclear Situation and Conference Call Notice

Paladin Energy Ltd (“Paladin” or “Company”) expresses its deepest condolences to the people of Japan following the tragic events of Friday 11 March 2011. “We are very saddened by the catastrophic events and extreme loss of life following the dual natural disasters of an earthquake and tsunami”, stated John Borshoff, Managing Director/CEO of Paladin. “We are encouraged that Fukushima plant managers are making public safety their highest priority and although the situation remains of grave concern it seems to be progressing slowly towards stabilisation of the damaged reactors”.

Paladin has had numerous queries regarding its business with Japan and the impact of recent events. While the Company endeavours to work with all participants in the nuclear sector and is developing a regional diversified sales portfolio, it does not currently have a commercial relationship with Japanese utilities. Paladin has a strong balance sheet with US$251.8M in cash as of 31 December 2010; is on track to produce 6Mlb to 6.3Mlb U3O8 in FY 2011; and commissioning of Langer Heinrich Mine Stage 3 expansion to 5.2Mlb U3O8 will occur in April giving the Company an installed capacity to provide 8.5Mlb U3O8 pa.

Paladin continues to believe that the medium and long-term outlook for nuclear power remains positive and that recent events could further exacerbate the supply situation, ironically putting Paladin in an even better position with respect to global demand. There are more than 440 nuclear reactors operating safely around the world and growth of the fleet is
assured with the 62 reactors currently under construction, with further expansion forecast from the emerging nuclear economies.

Note: New reactors need a year's supply of fuel as an initial load.
 
yes Im buying
Did it with the banks thru the GFC and then bought BP just after the oil leak shermozzle

Did it just after the papers implied that Obama should back off brit bashing because BP was in bed with everybody....cleaned up! giant gains!

nothing speccy, I am a very boring shares person, i havent the skill or the time of a trader.

I dont see why WOW (or insert large Oz company here...etc) goes down when something happens overseas, australians still have to eat

its basic and slow but I dont like exciting when it comes to money.
 
Think this is all going to cause a serious rethink.

Even the US's top Uranium adviser of 50 years , he's in his 80's now . said exactly what I said here awhile back.
He reckons Uranium and these plants aren't needed , they aren't clean anyway and they're a very expensive way of making power.
Reckons we have the means now to develop solar into whatever we need , it only needs focusing on.

Spose as a buy though you could at least get a nice come back spike for awhile later on though , while everyone's making up their mind and the dust settles on Japans worries .
 
Random I agree, but in the mean time the world still needs uranium.

PDN, EXT, ERA all off around 40%
 
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outside of the resource sector (which is the sector that has taken the biggest brunt of the recent sell off), there has not been much change.

Personally i have been pretty much status quo after my recent sell down (which was because of debt, not because i was expecting a crash)
Sniffing around, tinkering a bit, took a couple of small new positions in companies i am interested in. but nothing much given the overal market was down around 10%.

i'm still treading carefully, PE's might look 'cheap' on broker forecast earnings, but how reliable is the 'E' in the future PE.

i'm playing pretty conservatively.
 
Without either coal or nuclear, we'll be freezing in the dark.

Choose your poison. :D

Not quite true. Australia has more than enough gas on both sides of the country to fill the gaps and still export bucketloads. Of course the price of power will have to rise to use it but that's as much from the cost of having to build new power stations in today's dollars (rather than just use old, fully depreciated 1960s coal power stations) as it is about the price of gas. Like the wind and sun, gas, coal and uranium are also free - all you have to do is either dig them out of the ground or if you sink a well in the right place, gas just comes out of the ground by itself! Free as a bird... :p

Of course, Australia could go 100% renewable with solar thermal and storage but the cost steps up again to do so. Probably to around the same % of household income that power used to take from us in the 1960s, when it actually used to cost a reasonable amount (and we somehow managed - people used to worry about switching lights off back then). Now it's just pathetically cheap, much the same as fresh water, which gets reliably delivered to your door every day for around $1/tonne. I know of nothing else that costs so little...

Other countries aren't so lucky though - and it's always energy security concerns that drive governments down the nuclear path. For many countries, those concerns haven't gone anywhere so nuclear will still be on their list, for good reason. Japan, for example, has very few meaningful alternatives for the scale of their power demand... that fact alone means nuclear still has a future in that market. I'm sure they have no desire to be fully exposed to the vagaries of the future of gas / oil prices...
 
Random I agree, but in the mean time the world still needs uranium.

PDN, EXT, ERA all off around 40%

just did a quick run through of the three companies mentioned above.

For those looking at this for a longer term investment, of the three only ERA stacks up as an 'investment' grade opportunity based on cash flow (net profit is not a very good way of valuing resource companies).

However i have no idea what the a good buying price would be for ERA shares. (ie the underlying company is investment grade, but at what price should one buy to have a decent probability of achieving a satisfactory return on investment).

Interesting to note that ERA has RIO as a long term major shareholder.
 
For those looking at this for a longer term investment, of the three only ERA stacks up as an 'investment' grade opportunity based on cash flow (net profit is not a very good way of valuing resource companies).

Any chance you can elaborate on this a little? Also, what time frame do you consider to be "long term"?
 
Don't know about "investment grade". ERA is a dog and RIO is believed to be a reluctant shareholder so their shares are seen as "overhang" not "cornerstone".
 
Any chance you can elaborate on this a little? Also, what time frame do you consider to be "long term"?

Investment grade just means that the company has generated profit, is generating profit and should continue to generate profit (or in this cash cashflow). ie the underlying business is making money on its own feet.

Looking at the past 10 years of financial history, ERA has generated cash flow in each year. The number of shares outstanding (ie total shares) has remained constant during this time (so it hasnt periodically during this time been tapping shareholders for extra capital).

So this just means that the company can be 'valued', in a traditional sense.

PDN has been loosing both cash flow and profits for most of the last 10 years.
So it has been reliant on raising capital periodically to pay for these losses. This can been seen by the number of shares outstanding rising from 151million in 2001 to 717million in 2010 (not all of this might have been cash raising, some might have been excersising of options, buying out other companies through the issue of shares, but you get the general picture). Broker forecasts estimate PDN moving to profit (but i dont know about positive cash flow, my screen doesnt provide this information) over the next two years.
So its possible that PDN will become investment grade in the future.

In regards to ERA being a dog. It could be. Even though it generates cash flow, there have been periods when the retention of that cash flow hasnt generated a return above the cost of that capital (ie Cash Flow Adjusted Return on Incremental Cash Employed)

There is no fixed period for long term, but a guide might be 5 years, 10 years.
 
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