This Week’s Commentary – published after the close, December 15, 2006.

by JDH on December 16, 2006

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
1.5%
AXU.TO – Aurora Energy Resources, Inc. Buy
1.5%
BTT.V – Bitterroot Resources Ltd. Buy
1.5%
CXX.V – Crosshair Exploration & Mining Corp. Buy
1.5%
DML.TO – Denison Mines Corp. Buy
2.0%
FRG.TO – Fronteer Development Group Inc. Buy
12%
JNN.V – JNR Resources Inc. Buy
4.0%
LAM.TO – Laramide Resources Hold
3.0%
MAW.V – Mawson Resources Ltd. Buy
1.5%
MGA.TO – Mega Uranium Ltd. Hold
12%
PAA.TO – Pan American Silver Corp. Buy
8.0%
PDN.TO – Paladin Resources Limited Buy
8.0%
PNP.TO – Pinetree Capital Corp. Hold
12%
PXP.V – Pitchstone Exploration Ltd. Buy
1.5%
SAN.V – Santoy Resources Ltd. Buy
1.5%
SGC.V – Sunridge Gold Corp. Buy
5.0%
SSO.TO – Silver Standard Resources, Inc. Strong Buy
6.0%
SSR.TO – Southern Star Resources Inc. Buy
6.0%
SXR.TO – SXR Uranium One, Inc. Hold
1.5%
TVC.V – Tournigan Gold Corp. Buy
1.5%
URE.TO – Ur-Energy, Inc. Buy
1.5%
UUU.V – Urasia Energy Ltd. Strong Buy
4.0%
TUE.V – Titan Uranium Inc. Hold
1.5%
     
  Total
98.5%

Note that the chart adds to 98.5%, on the assumption that the portfolio is 1.5% in cash.

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

Stocks

  • ABX.TO – Barrick Gold Corp Wait to buy – major downtrend since May 11, minor uptrend since June 13, wait until it decides if it’s going up or down before buying; aggressive investors could start accumulating (I’m not; I think there are better golds to buy)
  • AQI.TO – Aquiline Resources, Inc. Hold – Big increase in November, now in a consolidation phase.
  • ASX.V – Alberta Star Development Corp. Hold1.5% – Trading range since May; wait until break out to buy more.
  • AXU.TO – Aurora Energy Resources, Inc. Buy1.5% – has corrected from $14.90 down to around $13 in December so far; probably a good buy point; it’s back down to it’s long term uptrend line
  • BAY.V – Bayswater Uranium Corp. Sold High of $1.69 on September 6; corrected down to $0.82 on October 19; closed at $1.32; not a particularly compelling chart, but probably no point in selling now either. However, we can’t own every stock in the world, so to free up cash Bayswater gets cut; will monitor for possible repurchase later.
  • BTT.V – Bitterroot Resources Ltd. Buy1.5% – HighHigh of $0.89 on April 19; subsequently corrected to $0.32 on September 15; got back up to $0.78 on November 27, and has since corrected to $0.62; it would appear that this one is a buy, but only for a small portion of your portfolio.
  • CCO.TO – Cameco Corp. Wait – High of $49.95 on May 11; downtrend line appears to have ended around December 6; however, I would wait for a positive upside break-out, preferably over $50 Canadian, before getting back into this one, particularly with the uncertainty surrounding the Cigar Lake mine.
  • CHX.V – Cash Minerals Ltd. Wait Trending downward since peak of $2.24 on September 6; minor top of $1.98 on November 30; appears to have solid support at $1.20, so I would continue to hold if I owned it, which I don’t. Unfortunately the portfolio is full, so since I can’t own every stock that exists, this one gets cut. If it breaks into new ground, I will consider purchasing it again.
  • CVV.V – CanAlaska Ventures Ltd. Wait – Similar chart to many other uraniums; I see no compelling reason to buy at this time.
  • CXX.V – Crosshair Exploration & Mining Corp. Buy – 5% I sold my shares at $4.00 on December 11; it closed at $3.54 on Friday, so it’s probably time to get back in; (this is a play on the Dines Letter recommending this one at some point in the future, which should cause a nice pop, probably well over $4.
  • DML.TO – Denison Mines Corp. Buy – 6%Denison merged with IUC.TO – International Uranium Corp. in early December; it’s now had a pullback, so it looks like a buy to me. Denison was criticized in the past for not acquiring any companies; now that it has, and since presumably further acquisitions are likely, it’s time to get back into Denison.
  • FRG.TO – Fronteer Development Group Inc. Buy – 20%Peaked at $11.24 on November 24, and dropped to close on Friday at $9.38. This looks like a normal consolidation to me, and it’s probably a good buy point. This is a solid “near blue chip”, and forms a nice chunk of my portfolio.
  • IUC.TO – International Uranium Corp. It’s gone – Merged with Denison; read the commentary for more details.
  • JNN.V – JNR Resources Inc. Buy – 5% As with many uraniums it peaked early in the month, and has pulled back since; probably a good buy point around the close on Friday of $1.97
  • LAM.TO – Laramide Resources Hold – 5% In a trading range between $7 and $8 since the beginning of November; hold until it decides which way it wants to go.
  • MAW.V – Mawson Resources Ltd. Buy – 1.5%Mawson spiked up to $2.10 on April 11 before falling to 82 cents on June 30. It has since recovered to close on Friday at $1.58. Mawson was mentioned in the Dines Letter on December 5 as a Stock Dines has owned for some time, but has not yet recommended, presumably because he’s waiting for a pullback. Recent stregth indicates it’s probably time to take a small position now, in advance of a future recommendation by him.
  • MGA.TO – Mega Uranium Ltd. Hold – 20%Chart appears to be breaking down; I sold a few shares at $4.95 on Friday; Mega closed Friday at $4.86; Support appears to be around $4.50, so it’s a reduce down to that point, and then buying will probably resume around that level. Since I can’t pick a short term bottom that closely, it’s a hold for now.
  • PAA.TO – Pan American Silver Corp. Buy – 10% Solid uptrend since a low of $19.70 on October 4, 2006; closed on Friday at $28.80; high for the year was $32.13 on March 30, so we are closing in on a new high; I would continue to accumulate in anticipation of further streghth, particularly since the first quarter of the year is usually a strong time of year for gold and silver stocks.
  • PDL.TO – North American Palladium Ltd. Nope – Nothing compelling here; unless you like buying stocks in downtrends, I see no reason to own this one.
  • PDN.TO – Paladin Resources Limited Buy – 10% Absolutely gorgeous chart; Paladin remains a strong buy.
  • PNP.TO – Pinetree Capital Corp. Hold – 20% Very interesting movement on Pinetree; read my detailed commentary for more details.
  • PXP.V – Pitchstone Exploration Ltd. Buy – 1.5% Although we have had a pullback over the last two weeks (like most of our other stocks) I still like Pitchstone.
  • SAN.V – Santoy Resources Ltd. Buy – 1.5% High for the year was 90 cents on April 12; then fell to 29 cents on October 11, before going back up to a close of 70 cents on Friday. Santoy was mentioned in the Dines Letter on December 5 as a Stock Dines has owned for some time, but has not yet recommended, presumably because he’s waiting for a pullback. Recent stregth indicates it’s probably time to take a small position now, in advance of a future buy recommendation by Dines.
  • SGC.V – Sunridge Gold Corp. Buy – 5% Still a buy, chart still looks good despite recent consolidation.
  • SSO.TO – Silver Standard Resources, Inc. Strong Buy – 6% Significant resistance around the $36.29 level, but at $34.27 where Silver Standard closed on Friday, it’s still a strong buy.
  • SSR.TO – Southern Star Resources Inc. Buy – 4%New high of $7.66 made on Thursday, before a pullback on Friday, still a buy. One of the best performing gold stocks at the moment.
  • SXR.TO – SXR Uranium One, Inc. Hold – 1.5% In a trading range between $13 and $15, but I see no reason to sell.
  • TVC.V – Tournigan Gold Corp. Buy – 1.5% Support around $3, still a buy.
  • U.TO – Uranium Participation Corp. Nope – Congestion between $12 and $13; not in my portfolio, so no further comments.
  • URE.TO – Ur-Energy, Inc. Buy – 1.5% Consolidation since mid November; still a buy.
  • UUU.V – Urasia Energy Ltd. Strong Buy – 8% Big uptick on Friday, close to a new high, still a strong buy
  • TUE.V – Titan Uranium Inc. Hold – 1.5% In a congestion area at the moment; we will wait until it resolves
  • Check out the Top Picks page for current recommendations, and feel free to leave a comment by clicking on the comment button below (you have to register to leave a comment, but feel free to use whatever name you want).

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