Rising uranium prices and investor speculation may be the reason…
The post Why the Alligator Energy (ASX:AGE) share price is up 200% in a month appeared first on The Motley Fool Australia. –
The Alligator Energy Ltd (ASX: AGE) share price is radiating green over the last month.
At the time of writing, shares in the uranium miner are trading for 9 cents each – up 5.88%. That’s an increase of 200% since this time last month.
For context, the ASX All Ordinaries Index (ASX: XAO) is 0.29% lower today and down by just over 3% in the past month.
Let’s take a closer look.
One reason for the rising Alligator Energy share price over the month could be an announcement made on 17 September.
The miner gave updates for its Samphire Uranium Project, the Alligators Rivers Uranium Province, and its Big Lake Uranium mine. It also gave an update regarding its CEO.
Alligator received $130,000 from the South Australian government for its Big Lake mine and has held meetings with traditional owners of the lands the other mines reside in. Drilling companies have been identified and initial drilling should begin shortly.
In regards to its CEO, the board confirmed the current holder, Greg Hall, would be given a full-time contract effective from 1 September.
Alligator chair Paul Dickson said:
The board is delighted to have secured the full-time services of Greg Hall as your CEO at a time that we are well funded for a highly anticipated work program at our key uranium projects over the next 18 to 24 months.
Is the price of uranium affecting the Alligator Energy share price?
As Motley Fool has previously reported, Alligator Energy is a price taker.
As an ASX resources company that produces a commodity, its results are usually largely tied to the movements of whatever commodity in which it specialises — in this case uranium.
The price of uranium has skyrocketed from US$30 per pound to just shy of US$50 per pound since 16 August. That’s a 65% increase in just one month.
The Alligator Energy share price has moved in a similar direction. The website Trading Economics expects the price of uranium to be at roughly the same level in 12 months’ time.
Is anything else influencing Alligator Energy shares?
One last possible reason for the rising Alligator share price may be the new AUKUS agreement between Australia, the United Kingdom, and the United States. As part of the agreement, Australia will acquire nuclear-powered submarines for the first time.
To be clear, Alligator Energy is not involved in any procurement or government contracts relating to this deal. Also, there are no indications Australia is planning to expand its civilian nuclear capabilities. In fact, Prime Minister Scott Morrison explicitly ruled it out in an interview with 2GB Radio.
However, this isn’t going to stop some investors from jumping on the early bandwagon. If some even suspect there could be a material change to their benefit in a particular company or industry – they will jump on it.
Australia’s purchase of nuclear submarines may be the first sign of a growing nuclear industry in the country, at least according to some investors.
Alligator Energy share price snapshot
While the Alligator Energy share price has had an impressive month, it’s had an even more impressive year. Over the past 12 months, Alligator shares have appreciated by more than 700%.
Its 52-week high is 12 cents per share and the 52-week low is 0.4 cents per share.
Alligator Energy has a market capitalisation of approximately $215 million.
Should you invest $1,000 in Alligator Energy right now?
Before you consider Alligator Energy, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Alligator Energy wasn’t one of them.
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*Returns as of August 16th 2021
Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.