What's caused PDN to drop so much ?
- it is a producer with proven results
- its projected to reach 10 million pounds per annum in a few years
- at $50 proft per pound that would equate to $500 million profit.
These are not pie in the sky numbers from an explorer they could even be exceeded. And there production is likely to grow further from there
Isn't it Market Cap at $2.8 billion cheap ??
My guess is we will underestimate the number of reactors being built by 2020 which will add to the rapid growth in demand.
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PETEAI
10c divvy on a $4 share is returning 2.5%
10c on the 602mil shares is $60.2 mil to the shareholders pa so would need what - all of your $500m profit I would suggest so $4 seems about right for this sort of return "in a few years" don't you think??
Treefrog
I'm not sure that a dividend valuation model is very suitable for Paladin mate....
Dividend price models are traditionally used for more stable or mature growth companies. Paladin clearly is a growth company, who is likely to withhold dividend receipts because it can re-invest its funds at a much high rate of return than its cost of capital. Your analogy is like comparing Telstra to say BHP on the basis of their dividend - on paper, your maths would have had Telstra up on BHP 3 years ago - we all know who has performed better!
Cheers
Treefrog
I'm not sure that a dividend valuation model is very suitable for Paladin mate....
Dividend price models are traditionally used for more stable or mature growth companies. Paladin clearly is a growth company, who is likely to withhold dividend receipts because it can re-invest its funds at a much high rate of return than its cost of capital. Your analogy is like comparing Telstra to say BHP on the basis of their dividend - on paper, your maths would have had Telstra up on BHP 3 years ago - we all know who has performed better!
Petai, fan of the Uranium stocks I see. The simple fact with Paladin is that we are just not quite certain how quickly they can get Langer up to 10 Mil, currently it's sitting at 2.6, 3.7 by next year and perhaps six the year after. The problem with the Paladin equation is that there are so many variables here - how fast can they get up to 10 mil, what is the likely capital cost incurred to get them there, what is the U price they will end up receiving, will there be large Opex increases for them (probably the biggest issue for the mining industry in general, most estimates I see going around at the moment seem to suggest Opex inflation is huge, particularly in such a specialised industry like the U sector which requires knowledgeable staff that are hard to come by)... Hence why I haven't bothered to attempt a DCF here.....
This leads me to think that Paladin is still and will be for some time a stock driven by momentum, rather than fundamentals. And momentum wise, this stock has been in a downtrend for some 1.3 years, have a look at my posts back when PDN was at 9 and 7 bucks. However, just below 4 appears now to be very strong support and therefore perhaps a consolidation/accumulation will come shortly. What I will say is that with the development pipeline they have, the market capitalisation they currently command is very conservative (i.e. seems to factor in only Langer and a tiny bit of upside). So, it is attractive from a fundamental view point. But as always, it is best to wait for the technical view to align with the fundamentals, unless you are extremely patient and are confident of your fundamental price estimate.
Cheers
What's caused PDN to drop so much ?
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PETEAI
"JOHANNESBURG (Business Day) -- Global warming, rapid economic growth in emerging economies such as India and China and delayed investment worldwide in new generating capacity, have resulted in a great number of new nuclear power stations being planned around the world.
Asian countries are leading the way and about 30 nuclear reactors are expected to be built in China by 2020, while Japan, India and Pakistan each have several more reactors on their drawing boards.
The rush to build nuclear plants has contributed to the substantially higher price of uranium over the past three years. So it is no surprise that construction companies are warning that nuclear power plant programmes may be delayed by equipment supply constraints.
The production of nuclear power plants may be stalled because of a backlog at Japan Steel Works. The company makes four a year. A shift to double capacity will not be enough to meet demand.
In Finland, the construction of a new technology reactor has been delayed for two years. The nuclear industry globally has a history of cost and time overruns. It is something that Eskom is going to have to manage very carefully indeed.
Investors in uranium explorers and miners will also be thinking twice about the risk this delayed consumption poses to the cheery projections of massive near-term demand increases."
Burn up rate is the amount of electricity from a given amount of fuel, expressed in gigawatt-days per tonne of U ...GWd/tU
What's caused PDN to drop so much ?
- it is a producer with proven results
- its projected to reach 10 million pounds per annum in a few years
- at $50 proft per pound that would equate to $500 million profit.
PETEAI
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