Monday, May 9, 2011

Uranium Energy Corp. (AMEX: UEC) Q3 2011 Price Target

Recent price: 3.23$
P/E Ratio: -
3 Months Target Price: 6$

Company Description
According to Reuters, Uranium Energy Corp. is an exploration-stage company. The Company is a natural resource exploration company engaged in the exploration of properties in the United States. As of July 31, 2010, the Company had interests in 50,253 acres of leased or staked mineral properties, consisting of claim blocks located in the States of Arizona, Colorado, New Mexico, Texas, Utah and Wyoming. Its properties do not have any reserves. As of July 31, 2010, it had no revenues. On December 18, 2009, the Company completed the acquisition of ownership interest in the South Texas Mining Venture, L.L.P. (STMV). The assets of STMV include the fully licensed and permitted Hobson in-situ recovery (ISR) Processing Plant (Hobson); the La Palangana Uranium project (Palangana), which is at an advanced stage of permitting; a portfolio of exploration-stage properties located in South Texas and data files that document decades of South Texas-focused uranium exploration and mining.

Confidence Margins
Strong resistance $7.08 (+119%)
Light resistance $4.56 (+41%)
Light support $3.00 (-7%)
Strong support $2.40 (-26%)

Ever since the earthquake in Japan and the meltdown of a nuclear reactor there, there has been a lot of speculation about the future of the use of nuclear energy. Uranium being the element of choice for this technology and Uranium Energy's main exploration target. The stock got severely hit since then.

Entry strategy
For the cautious investor:
Buy the stock for 3.50$ or less.

For the risk-taking trader:
The November 2011 5$ out-of-the-money call option contract seems to be the right position to take, they can be acquired for about 40$ per contract.

Exit Strategy
For the cautious investor:
Sell when the stock reaches 6$, or keep it until 7$ if you are more bullish in your own analysis.

For the risk-taking trader:
The contracts should be kept until the underlying reaches around 6$. This should provide a satisfactory return if the underlying reaches the target price as the contracts will get in the money.

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