Server: Microsoft-IIS/3.0 Date: Thu, 20 Nov 1997 22:04:57 GMT Content-Type: text/html US Energy Investor News - RAF Report on US Energy


RAF Financial Corporation Report on US Energy









RAF FINANCIAL CORPORATION
May 10, 1996
U.S. Energy Corp.
USEG (NMS) - $20

Recommendation:
Buy and Accumulate in View of Price Targets

Earnings (FY ending May 31)
1995 - ($0.42)
1996 - $1.25
1997 - $0.50
1998 - $2.00

2-Year Price Target: $38
4-Year Price Target: $114

  • Uranium is one of the few commodities in which there is a supply shortfall that is huge (65 million pounds per year) and increasing.
  • Given the cost structure of the uranium producers, uranium prices, which have risen from $11.85/lb to $16.25/lb in the past six months, are likely to rise further, to at least the $25/lb level.
  • The share price of U.S. Energy should benefit more than any other producer from higher uranium prices.
  • At $20/lb uranium, U.S. Energy could earn $2 per share by 1998, and nearly $4 per share by 2000.
  • U.S. Energy has other valuable assets in gold, molybdenum, oil and gas, and commercial properties, as well as a clean balance sheet.

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