The next stock, in the portfolio of uranium miners and ETF’s that were assigned by George on November 12, 2014, is Energy Fuels Inc. (EFR TSX, UUUU NYSE). The company is an integrated producer of uranium and vanadium and owns the only conventional uranium mill in the United States. Vanadium is used in steel alloys and in advanced battery designs. EFR expects to produce 825,000 pounds of uranium in 2014 and has realized an average price of $57.00 per pound resulting from three long term contracts. In addition to the current portfolio of producing mines there are expectations that the existing land position has the potential to expand output.
On a macroeconomic basis the case for uranium is centred on increasing global demand for electricity and for sources of power that don’t add greenhouse gases to the atmosphere. In addition there is the familiar narrative of the pending demand for uranium arising from the restarting of plants in Japan and the significant build out of capacity in China.
A scout of the charts will ad context to the evaluation of these share.
The three-year chart exhibits many of the same patterns as the other stocks that have been examined over the course of this assignment. The most profitable ride was the Q1 pop that emerged from a 52-week low of $4.75 in November of 2013 to the 52-week high of $13.03 in March of 2014. Coming off the March high the shares dropped in Q2 and broke down to $6.25 by October of 2014. Over a six week period EFR caught a healthy boost on the speculation that uranium prices would hit $50 per pound over the next twelve months.
The six-month chart provides a close-up of the buy signals generated by the MACD and the RSI in October as EFR moved off of $6.25 before meeting resistance near $9.00. Also evident is the support that the stock has built along the 200-day moving average over the last two weeks of trading. At the moment the shares are moving out of an overbought situation that needs to be monitored to verify that support along the 200-day moving average will be maintained.
Make it a profitable day and happy capitalism!