For the 1 stock contest, I pick Unor, Inc. (UNI.TO, UNOFF.pk).
I expect uranium stocks to do well again in 2007. While the near term producers were the stars in 2006, and while I expect them to do well again in 2007, I think that there are high expectations built into the price of most of them already. Reaching for the kind of huge returns that will probably be needed for respectability in this contest, I have decided to go with an early stage development company.
Unor, Inc., formerly Hornby Bay Exploration Limited, is a development stage company with interests in exploration and development properties in Canada. Its primary focus is on uranium exploration in the Hornby Bay Basin in western Nunavut, Canada. The primary reason why I have picked Unor over other uranium development juniors is its strategic alliance with Cameco. The details of that alliance can be read in Unor’s filings at Sedar, but essentially Cameco has a 20% stake in the company for which it paid a little over CDN $9 million.
I don’t pretend to be able to evaluate the development potential of the Hornby Bay uranium deposits. But I have invested in Unor on the theory that there is no-one on the planet better able to make that assessment than the folks who run Cameco, and that my money can follow theirs. The price paid by Cameco for its shares was CDN $.40, and for a time it depressed the price of the stock to that level. But the stock has begun to climb in recent times, and, if expectations for the Hornby Basin do pan out, the stock will be a huge winner.
The company is debt free, and at 9/30/06 had CDN $6.5 million in cash.
Ironically, this will not be one of my Pick Six choices, as I am not sure what the next 3 months will bring in the stock. However, I do think by the end of the year, the story will be known.
