Valuation: Discount above long-term averages The discount, currently at 21.3%, is above its three-year average of 15.3% and its five-year average of 12.0%. This arguably reflects sentiment in the space and recent performance. However, valuations are now at multi-year lows and we consider that GCL is well positioned to benefit from any recovery in the space and that it may be of interest to long-term investors looking for diversified global uranium exposure.
This stock seems bombed out and unloved! Have bought some 32p as i think uranium has a future, you only have to see what the kids are plugging in to get it
11 Jun '12
CHAIRMAN'S STATEMENT Your Company's net asset value ended the six month period under review unchanged at 68 pence per share; its share price fell by 7% as the discount at which its shares trade to net asset value widened somewhat. These bald facts do not do justice to a period that showed real promise, only to end in a disappointment that has deepened since the quarter end. It was not until the start of 2012 that we left the post-Fukushima lows behind us, but in January and February better world economic news coincided with a marked change in sentiment towards uranium and uranium mining stocks and the Company's net asset value responded strongly. It increased by more than 20% in January, and the long awaited consummation of the apparently interminable Chinese Kalahari romance in February saw further progress and seemed to mark a turning point. March saw renewed weakness, however, a weakness that was especially frustrating because it attached so little to the fundamentals of the uranium space and so much to the macro backdrop, with mixed news from China, renewed doubt over the strength of the US recovery and, above all, the renewal of the eurozone crisis dragging markets lower. There is encouragement to be found. Through it all the uranium spot price has remained virtually unchanged at a little over USD50/lb, and it feels as though a firm floor has been established. Japan's last operating nuclear reactor may have been closed for compulsory inspection, but there is increasing evidence of local government support for a programme of plant re-opening; it remains Germany's stated intention to close its nuclear plants, but Frau Merkel has yet to indicate the source of the replacement power, and if M Hollande is less than supportive of older nuclear technologies, he has re-stated his support for the new EPR and Generation IV fast breeder projects. China's commitment to the nuclear project remains unshakeable, and closer to home it is interesting to note that Turkey has entered into collaboration with an enthusiastic China to develop a nuclear programme. A short term dominated by fears of a worldwide recession originating in the eurozone may present an unpromising backdrop, but the reality is that nuclear power remains attractive to any country without other traditional energy resources. The medium term case for the Company's focus on the uranium industry remains as valid as ever, while the authority granted by shareholders to diversify up to 30% of our assets into other resource related activities is particularly useful at times like the present.
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