Company Overview: Paladin Energy Limited (ASX: PDN) is a uranium producer with projects in Namibia. It also holds exploration and evaluation activities in Australia and Canada.
Paladin Energy Limited
PDN Details
Third Quarter FY21 Business Updates:
Top 10 Shareholders:
The top 10 shareholders together form ~31.71% of the total shareholding. Tembo Capital Management Ltd and Paradice Investment Management Pty. Ltd. hold a maximum stake at ~8.78% and ~7.84%, respectively.
Key Metrics:
PDN’s liquidity profile stands strong, with a substantial surge in FY20 and FY21 to 18.72x and 14.04x. The increased liquidity stance shall deliver PDN to facilitate mining and exploration activities’ investment requirements.
Outlook:
Key Risks:
PDN is exposed to exploration risk, project delays, and cost overruns. The company is expected to pace up its commercialisation timeline to build up revenues.
Valuation Methodology: Price to Book Value Multiple Based Relative Valuation (Illustrative)
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Stock Recommendation:
The stock of PDN gave a negative return of ~27.918% in the past year. The stock is currently trading lower than the 52-weeks average price level band of $0.410 - $1.120. The stock has been valued using the EV/Sales multiple-based illustrative relative valuation method and arrived at a target price with an upside of low double-digit (in percentage terms). Considering the decent movements in commodity prices and favourable cash position, the company might trade at a slight premium to its peers’ Price to Book Value multiple average. For valuation, a few peers like Boss Energy Ltd (ASX: BOE), Vimy Resources Ltd (ASX: VMY), New Hope Corporation Ltd (ASX: NHC), and others have been considered. Given the decent financial position, favourable commercialisation prospects, expanding investment resources, current trading levels, upside indicated by valuation, and key risks associated with the business, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.6825, as of 18 May 2022, 12:12 PM (GMT+10), Sydney, Eastern Australia.
PDN Daily Technical Chart (Source: REFINITIV)
Note 1: The reference data in this report has been partly sourced from REFINITIV
Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.
Technical Indicators Defined: -
Support: A level where-in stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.
Resistance: A level where-in stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices
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