Uranium Energy Corp. (NYSEMKT:UEC) Gains 80% in Four Weeks
The last few weeks have been quite extraordinary for Uranium Energy Corp. (NYSEMKT:UEC) as UEC stock has nearly doubled in value. Traded at $1.40-$1.50 per share in mid-April, Uranium Enrgy’s shares are now quoted around the $2.70 per share, or a staggering 80% higher. Daily volumes also marked a significant surge, thus pushing the 30-day average beyond the 2 million mark. So is it a goood time to be a UEC stockholder now?
The company is engaged in mining and exploring uranium and is said to control one of the largest historic exploration databases in the United States. Yet, UEC hasn’t made a dime in the last four quarters on record. What is more, it has not invested a single dollar in R&D. At the same time, the general and administrative expenses have averaged more than $4 million per quarter.
In the light of Japan’s recently announced intentions to revive its nuclear power energy sector, a lot of uranium businesses have got a boost on the charts and UEC is only one of them. Which s only natural given the prospect of increasing uranium demand on the international market.
Uranium Energy closed the quarter ended Jan. 31, 2015 with cash reserves of $4.36 million and working capital in excess of $5.6 million, which should provide safe business operations in the short term. UEC‘s mineral properties have been evaluated at $39 million. At the same time, however, those properties have annual maintenance expenses attached to them and these expenses have to be incurred so that the company can preserve its rights. That is why, generating cash flows from the sale of uranium, something that hasn’t happened for the last 18 months, is crucial if UEC is to continue as a going concern without having to dilute current stockholders.
Speaking of dilution, there is plenty of potential for one in the mid-to-long term. Out of 750 million authorized shares, approximately 92 million, or 12 per cent, have so far been issued and outstanding.
As far as UEC‘s current chart performance is concerned, it seems good enough to lure a few company officers into heavy insider trading. Since Apr. 15, five officers purchased a total of 52,800 shares of common UEC stock at prices ranging from $1.44 to $2.40 per share. One hour into today’s session, UEC stock is traded at $2.73 per share.
