Further to Monday's report on a Gold, Tech, and Biotech for 2010, here are two more we follow that trade at or below huge cash positions and provide exposure to Agriculture, Uranium, Gold, and potentially oil/gas - sort of a Full-Meal-Deal to balance risk with limited capital.
These are simple introductions so check their website for fundamentals and Sedar.com for financials.
1) Western Uranium (TSX: V.WUC, Stock Forum; 90 cents)
www.westernuraniumcorp.com
This is a company we reviewed on Stockhouse heading into November and still offers exceptional low-risk value given its large cash position and exposure to uranium, gold, and lithium. Here is a link to that November report:
https://stockhouse.com/columnists/2009/nov/2/penny-
miner-trades-at-its-cash-value
On Tuesday we witnessed a huge flow of money into the higher-risk microcaps. Western Lithium (TSX: V.WLC, Stock Forum; $1.65), of which WUC owns 18 million shares plus warrants, is now worth a minimum of $30 million, or 60 cents/share, to WUC shareholders (based on 60 million shares out for WUC). When you add this to WUC's $48 million in cash (worth 80 cents/share), we have plenty of room for capital appreciation without the typical risk associated with penny stocks.
2) Phoscan Chemical (TSX: T.FOS, Stock Forum; 40 cents)
www.phoscan.ca
https://stockhouse.com/columnists/2009/dec/1/another-cash
-rich-junior-with-substantial-hidden-v
In our December report I featured Phoscan but a very important development occurred within the phosphate/fertilizer sector on Tuesday.
Phoscan is sitting on more than $60 million (worth about 40 cents/share) and is looking for an oil/gas project to invest in. However, they also sit on a large phosphate deposit, which has seen $80 million invested to date. Fertilizer stocks lead the blue chips Tuesday following upgrades for the sector by a major Wall Street firm. It wasn't recognized in the trading of Phoscan but this news bodes well for a small, cash-rich stock like FOS where the phosphate deposit carries zero value by the market.
What happened Tuesday was that shares of potash fertilizer companies jumped following the settlement of an important Chinese potash contract. This was a long-awaited development and very important to the industry as a whole.
One analyst commented... "Empty inventories throughout the supply chain need to be restocked, potash prices are now attractively priced relative to corn, and farmer economics are favourable. 2010 fundamentals should improve significantly and I think that's giving people more confidence as we get into the seasonally strong spring,"
Potash Corp lead the rally on this news but even Mosaic (NYSE: MOS, Stock Forum; $64.23) did well after reporting very poor financials with net income down 88% from the previous year. This was indicative of how far the sector has fallen but at the same time, comments from the CEO indicate the sector may have bottomed.
"Phosphate demand is rebounding nicely, and we anticipate positive comparative volume trends over the balance of fiscal 2010, "said Jim Prokopanko, CEO of Mosaic.
Prokopanko said that although potash "orders remained soft, sales activity picked up toward the end of the quarter and we see this trend continuing into calendar 2010."
Disclosure: Danny Deadlock owns 25,000 shares of Western Uranium (TSX: V.WUC) and 30,000 shares of Phoscan Chemical (TSX: T.FOS).