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Strateco Resources Inc: BUY
Posted By Uranium Stocks On July 9, 2007 @ 2:01 pm In Uranium
Mining Stocks | 1 Comment
Due to the seasonal behaviour of the stock market, the summer is often
a good time to acquire some great stocks selling for a considerable
discount.
Uranium stocks have been hit by quite a sell off in recent months, and
this pullback could be a good time to buy some cheap uranium stocks.
We having been [1] watching Strateco since August 2006 but we now
think Strateco Resources is at a great discount and so we are signalling
a BUY on this uranium stock at $2.30 and we are adding it to our
uranium stocks portfolio as a BUY.
Strateco does not currently have any uranium mines in production so
this is more of an exploration play. A key component of a successful
exploration company is a good management team. Strateco has a good
management team with the President and CEO, Guy Hébert, who has
been a good track record having raised over $250 million for mining
projects over the last 30 years and he has occupied the role of President
and CEO of successful exploration companies, such as Audrey
Resources and [2] Cambior, which was a B[3] UY on our gold
portfolio until it was taken over by Iamgold. Jean-Pierre Lachance is
the Vice President and also has over 30 years experience in the
international mining industry. So will do not see any great holes in the
management team.
When looking to gain a significant return on ones investment, one must
consider the size of the company. A company too large can be slow to
move compared with the industry whereas a company too small may
prove to be too volatile to trade in, or the lack of liquidity may mean
that although your stock may have doubled, you cannot cash in your
profits due to the lack of volume. Strateco Resources does not have
either of these problems with 106.9 million shares outstanding and a
market cap of 245.77M. Over the last 30 days, the average volume has
been about 750,000 shares each day, which is enough to get in and out
without moving the stock price up or down too much. Also with a
company this size, it could easily be an acquisition target for any of the
larger uranium stocks. Strateco is well financed with over $25,000,000
in cash raised in February.
As for their projects, Strateco holds the Matoush, Eclat, Matoush
Extension and Mont-Laurier properties shown on the map below.
The Matoush Project covers an area of 164 km and Strateco has drilled
holes showing some high grade intersections of 2.00% U3O8. Cameco
and Uranerz are also involved in this area of operation and it looks like
an emerging uranium district that Strateco has been fortunate enough to
get a foot on early on in the game. There could be a case of Strateco
and Uranerz merging or one buying the other out. Or indeed we could
see Cameco buying one or both of them as they also have a position in
the area.
This year, Strateco has a budget of $16 million and they are going to
drill over 80 holes totalling 30,000 metres. The aim of this is to get a
definition of their resources, preferably to a NI 43-101 standard. They
also plan to build a camp to house 45 people and also construct a
winter road into the area.
A good aspect of there projects is that they are in a politically stable
country as they are in Quebec, Canada. Canada is the world’s largest
uranium mining country and the government is pro mining and
exploration and the resources business is a great part of the Canadian
economy. In today’s world as resources become more and more scarce,
any resources in politically stable countries are even more valuable.
This particularly applies to uranium where uranium supply is seen as a
politically stable fuel compared to for example oil. With trouble
brewing in Niger and possibley other countries with uranium, projects
like Strateco has in politically stable countries become more and more
precious.
As this is primarily an exploration play, technical analysis is not always
as useful as it is with larger companies but nonetheless it sould be taken
into consideration.
From its high of $4.00 Strateco Resources has fallen 42.5% so it is one
of the most discounted uranium stocks on the market today. If one was
going to buy this uranium stock, it seems much more sensible to buy
now, than on the top of a precarious spike. The STO, MACD and RSI
are all on the floor, giving us a bullish signal.
We made a small purchase today at $2.32 and Strateco Resources is
now on our uranium stocks portfolio as a BUY.
[4] Strateco Resources Inc. trades as RSC on the Toronto Stock
Exchange.
Article printed from Uranium Stocks: https://www.uranium-stocks.net
URL to article: https://www.uranium-stocks.net/strateco-resourcesinc-
buy/
URLs in this post:
[1] watching Strateco since August 2006: https://www.uraniumstocks.
net/strateco-resources-inc/
[2] Cambior: https://www.gold-prices.biz/cambior-incorporated-36-
profit-in-3-months/
[3] UY on our gold portfolio until it was taken over by Iamgold: https://
www.gold-prices.biz/cambior-incorporated-36-profit-in-3-months/
[4] Strateco Resources: https://www.uranium-stocks.net/search/
Strateco