Results not bad at all I was expecting break even. Some of the investors were expecting a loss so some sold before the results & stock came under huge pressure touching $2.05. Some investors have not been able to correctly predict the the financial results.
The results were not bad at all considering the spot price. How ever I see some concerns too. The production was very high but they could not sell all their inventory. This could be an industry problem where producers cannot offload what they are producing. In short there could be weaken in demand. This is confirmed by the fact that U308 prices are declining and are around $49. CCO also had the same issues & like UUU they claim that they will sell more in the next quarter or two. Are these companies hoping to sell in the future or it is an issue of weak demand. If the demand is weak then there is glut of inventory & the prices will not improve & may even become weaker when some of the companies are eventually forced to off load the inventory in the market. I did not know that U308 was seasonal & heavy demand is in the last part of the year. There are some investors that are saying that as long nat gas is cheap it will put adverse prressure on Uranium sector.
Next quarter they will be producing at a higher cost & there are more chances are that they will be selling around $49 which will be e lower than the last quarter's sales price.
It is possible that Uranium sector will take a bit longer to rebound. Investors in Uranium sectors will have to monitor the inventory of large producers to anticipate the change in U308 prices.
One more thing that I did not like was withdrawal of Mitsui from Honeymoon joint venture project. This means Japanese are losing interest in Uranium & UUU will have to come up with the money to buy back their stake & plus fund the venture entirely.
Now about the share price the stock was very oversold & was trading in athe area of huge support. I am treating the bounce as an oversold bounce & did a few trades this morning. This stock is in a my comfort zone of aggressive trading.