- Uranium explorer Deep Yellow has found its shares among the most shorted on the ASX.
- The company’s flagship asset is the Tumas Project in Namibia, Africa.
- Deep Yellow completed a $220 million dollar capital raise to continue funding exploration and development at Tumas.
The rush of countries adopting ambitious carbon emission reduction targets coupled with the energy crisis spawned by the war in Ukraine placed uranium powered nuclear energy back into play as an energy source.
In 2022 the price of uranium was around US $40 per pound. As of January of 2024, the price had doubled, rising to US $80.36.
In the world of commodities trading, commodities with rapidly rising prices often drag up the price of the stock of explorers who have yet to produce a single ounce of the commodity.
Such is the case with Deep Yellow. In addition to its Tumas project in advanced developmental stages in Namibia, the company acquired two wholly owned prospective uranium assets in Australia in 2022.
The meteoric rise of the Deep Yellow share price (up 108% year over year) landed the company in the Top Ten ASX Mosted Shorted Stock list. The recent announcement of a capital raise drove the stock price down, creating a potential buying opportunity for risk tolerant investors.
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An analyst at Auburn Capital has a BUY recommendation on Deep Yellow shares, calling the stock a speculative buy, based on the company’s “substantial resource base and aim of achieving uranium production capacity of more than seven million pounds per year.”
Marketscreener.com has an analyst consensus recommendation of BUY on DYL shares, with three of the four analysts reporting a BUY and one at HOLD.
The Wall Street Journal has an analyst consensus rating at OVERWEIGHT, with three of the four analysts reporting a BUY and one at HOLD.
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