This Week’s Commentary – December 23, 2006

by JDH on December 23, 2006

The final full week of the trading year is over, the Christmas break has started (so in Canada we don’t resume trading until next Wednesday December 27), and it’s time to review our portfolio.

Two big stories this week. First as we reported earlier this week, the price of uranium was up $6.50 to an all time high of $72. That’s great news for all of us who are heavily invested in uranium stocks (in our Suggested Portfolio we are over 70% invested in uranium, with the balance in gold and silver stocks).

Second, The Dines Letter was published yesterday (December 22) and I am pleased to report that we guessed correctly both SAN.V – Santoy Resources Ltd. and MAW.V – Mawson Resources Ltd. are now on Mr. Dines recommended list. You can read my detailed thoughts, and what I plan to do, in my blog post Sell Santoy – Hold Mawson (although I guess from the article title you can figure out what I’m thinking).

I also think that TUE.V – Titan Uranium Inc. has broken down, so I’m selling it. Here are further details:

Charts Updated This Week

My detailed comments are listed below. As a new feature this week, I have added a suggested portfolio (see table below), with my suggested weightings. My thought process is as follows (feel free to post a comment below if you agree or disagree).

First, the Big Three, Fronteer, Mega, and Pinetree comprise 36% of the portfolio (12% each, indicated in bold in the table below). Next, I have a gold and silver component equal to 26.5% (indicated in gold font in the table below). The balance of the portfolio is in junior uranium shares, based on the assumption that as the price of uranium continues to increase, institutional investors will gravitate towards the junior plays, which have the most potential upside. If you would like to see the table in Excel format, you can get it here: Suggested Portfolio Spreadsheet.

Suggested Portfolio

Stock Ticker Symbol and Name Recommendation Weight
ASX.V – Alberta Star Development Corp. Hold
AXU.TO – Aurora Energy Resources, Inc. Buy
BTT.V – Bitterroot Resources Ltd. Buy
CXX.V – Crosshair Exploration & Mining Corp. Buy
DML.TO – Denison Mines Corp. Buy
FRG.TO – Fronteer Development Group Inc. Buy
JNN.V – JNR Resources Inc. Buy
LAM.TO – Laramide Resources Hold
MAW.V – Mawson Resources Ltd. Buy
MGA.TO – Mega Uranium Ltd. Hold
PAA.TO – Pan American Silver Corp. Buy
PDN.TO – Paladin Resources Limited Buy
PNP.TO – Pinetree Capital Corp. Hold
PXP.V – Pitchstone Exploration Ltd. Buy
SAN.V – Santoy Resources Ltd. Buy
SGC.V – Sunridge Gold Corp. Buy
SSO.TO – Silver Standard Resources, Inc. Strong Buy
SSR.TO – Southern Star Resources Inc. Buy
SXR.TO – SXR Uranium One, Inc. Hold
TVC.V – Tournigan Gold Corp. Buy
URE.TO – Ur-Energy, Inc. Buy
UUU.V – Urasia Energy Ltd. Strong Buy
TUE.V – Titan Uranium Inc. Hold

Note that the chart adds to 97.0%, on the assumption that the portfolio is 3.0% in cash.

Here is the detailed commentary on the individual stocks (all figures in Canadian dollars).

Detailed Stock Commentary

{ 2 comments… read them below or add one }

eljefeford December 23, 2006 at 5:47 pm

Nice call on Santoy and Mawson. It will be interesting to see where they open next week. Any reason Dines doesn’t follow Urasia Energy? Not a lot of jr uranium companies actually pulling ore out of the ground. Could it be the location/political situation?

JDH December 23, 2006 at 7:09 pm

It’s a good question: why doesn’t Dines follow Urasia? It could be that he can only follow a limited number of companies.

Of course another answer could be that he does follow it, he just hasn’t started covering it in his newsletter. It appears that he likes to accumulate stocks himself first, before he tells the world, just like he did with Mawson and Santoy.

Either way, if the fundamentals and the chart looks good, it’s a buy, whether Dines, or the rest of the world, has caught on to it or not.

{ 1 trackback }