RE: UUU and SXR dead money for now?/valuationTo get an estimation of the sxr stock potential you could assume the 19 million pounds of uranium production by 2012 which was mentioned in an intervue in RobTV with sxr President Foreman, and also in their new pdf presentation. They also mentioned that the company in their internal calculations is profitable at USD 50-60 U3O8.
Therefore breakeven ought to be lower, probably much lower. I assume at USD 25 per pound as you can see below.
This means that, assuming a long term average uranium price of USD 80 as the expected average in 2012 and thereafter, sxr would show revenues of about USD 1520 million that year.Assuming total costs except for tax to about USD 25 per pound - maybe to a little bit to much though since cash costs are very low - sxr gets earnings of USD 1045 million before tax, after tax USD 653 million assuming 37.5 % tax (due to assumed higher tax in Kazakhstan)
There were 387 million fully diluted shares after the Urasia take-over, but I assume a little more stock dilution to 400 million shares. The earnings per share would be CAD 1.89 (with USD = 1.16 CAD). .
In 2012 beeing in the very top class of uranium producers sxr Uranium One should be valuated in the order p/e 10-13 - giving a stock potential to around CAD 18.9 - 24.6 in 2012.
The 2007 discounted value (with 10 % interest rate) of that stock price would be CAD 11.75 - 15.30. To this price target we should add the value of the shares in Aflease Gold which in very round figures would be 2 % of the sxr market capital, or around CAD 0.3.
Uranium USD 80 as long term average price : 2007 SXR suggested price target 12-15.60
And since SXR is trading within that range or slightly above, if you accept the assumptions in this calculation, you find that SXR should be full priced now assuming a USD 80 long term average uranium price.
My conclusion is that SXR is not so cheap anymore or even slightly overpriced at least relative to some other uranium stocks, considering the actual company structure. There are some rather cheap uranium stocks left though, that as a group, if not all of them, ought to outrun SXR the coming 1-3 years.