The Deep Yellow Ltd (ASX: DYL) share price is jumping higher in afternoon trade on Tuesday. At the time of writing, the shares are 8.47% higher at $1.92 a piece.Â
The shares are still down 1.54% for the year to date, however, after the uranium miner lost over 35% of its share price value in March alone.Â
Deep Yellow posted weak half-year results in early March, revealing that its consolidated loss for the six months to 31st December had jumped to $7.8 million, up from $2.5 million in the prior year.
It looks like some investors also started selling up their shares after the stock rallied earlier in the year, taking their gains off the table.
Meanwhile, there was broad weakness across in the uranium industry. This was potentially exacerbated after speculation that the company would launch a capital raising. The company has denied this will happen.
Despite the latest volatility, the shares are still 102% higher than 12 months ago.
So why are Deep Yellow shares climbing higher again today?
The uranium miner’s shares are climbing higher again today as investors buy back into the company. There hasn’t been any price-sensitive news out of Deep Yellow recently to explain the increase, but after the latest sell-off, it’s likely that investors are snapping up the shares in the dip.
The increase may also come off the back of some recent stabilisation of uranium prices. Trading Economics data shows that uranium futures in the US are steady around US$85 per pound, trading in a narrow range since dropping to a two-month low in mid-March.
Are the shares a buy, sell, or hold?
Despite weaker than expected half-year results, Deep Yellow confirmed it is positioning itself as a future uranium producer and is actively pursuing a “dual pillar” growth strategy.
The company plans to build a uranium production platform capable of producing more than 10 million pounds per year. Its two main assets are the Tumas Project in Namibia and the Mulga Rock Project in Western Australia. They’re both projects located in established uranium regions and are expected to underpin the company’s long-term development plans.
Management also flagged that mergers and acquisitions could form part of its growth strategy if opportunities arise to acquire high-quality uranium assets.
Market Index data shows that brokers are positive on the outlook for Deep Yellow shares. They rate the stock as a buy, and its average $2.44 target price implies a potential 26.25% upside at the time of writing.Â
The post Why is everyone buying Deep Yellow shares today? appeared first on The Motley Fool Australia.
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Motley Fool contributor Samantha Menzies 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 Scott Phillips.