A pair of uranium companies that are candidates for inclusion in two Russell indexes could offer a big return over a short period of time, based on an outlook from Dundee Capital Markets.
In a note to investors, Dundee analyst David Talbot said that the two companies, Ur-Energy Inc. and Uranerz Energy Corp., were included on a preliminary additions list for the Russell Global Index and the Russell 3000 Index. Russell indices are widely used by investors for index funds, with roughly $3.9-trillion in institutional assets benchmarked to them.
Uranerz was previously included in the Russell 3000 index, before being dropped last year. The company was added to the index in 2009 and rallied 45% between the first preliminary addition announcement to the point when it was included. Uranerz then lost 23% when it was removed last year.
Mr. Talbot is recommending investors buy into both Uranerz and Ur-Energy before the final list is announced on June 24.
“Most index investors are going to wait until another preliminary list is announced on June 17, and the final list announced on June 24, before they are bound to the inclusion by June 27,” Mr. Talbot said. “This gives some time for the speculators to buy before we see the likely bump in trading on June 24th.”
Ur-Energy (TSE:URE) last traded at $1.41 on the Toronto Stock Exchange, while Uranerz (TSE:URZ) traded at $2.78.
jshmuel@nationalpost.com
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