Last month I was thinking this stock would go to about the mid 5's. Now, I am rethinking that and believe UUU will go into the 4's or lower. This is based on the latest news on the housing industry. I'm not sure UUU can survive a prolonged downturn in the housing market and recession.
No agenda here. I owned UUU when it was in the 30's. I got out with only a small loss. I have seen the stock spiral down down down since then. At some point UUU may become a buy but certainly not now. Market conditions for this sector show no signs of improvement. In fact the last few reports on the economy and housing sector show that its in much worse shape than most analyst thought. So, if you feel UUU is a buy then go purchase more shares. My bet is that this is at least dead money for a few years.
I do think they will lose money in the current quarter, a lot of it in fact by writing off 3 million or so invested in Canada, however they will then be set up to be very profitable in 2008 and rise 100% or so off the lows. The nice thing here is that's priced into the stock, and the upside wildcards like getting regional china or japanese licenses both of which their jv partner is working on are not and have the ability to send this stock to new highs in 2009 imo. Gee by 2009 which is only a year and a day away us housing might even recover and put the stock above 36, a 600% bagger from here, so selling or shorting here seems pretty stupid from a risk/reward standpoint.
Precisely the negativity you see at lows. UUU as horribly as its performed was still profitable (and very much so if you strip out the canadian losses), has a double digit book and peak earnings power of likely over $3 bucks a share. This is clearly the time to load up. If they shut down Canada which I see as an increasing likelihood, while they would have to do a writedown of their investment, earnings would immediately lift and the stock should go over 10 quickly. With the end of tax selling Monday afternoon only the truly ignorant would sell this stock here.