The new year hasn’t been too kind to Deep Yellow Ltd [ASX:DYL]. Their stocks have been downsizing all throughout January and into early Feb. This morning has continued the trend as their stocks have decreased by 10%.
Last year, DYL saw steady growth in their shares, especially throughout the early months of the year.
DYL’s overall market value sits on $46.213 million as well as an enterprise value of $36.42 million.
Why are their shares on the decline?
Deep Yellow may have seen a decrease in shares, but that doesn’t necessarily mean it’s all doom and gloom for the Australian uranium company.
Their most recent drilling campaigns such as the Namibian projects, saw successful results and are looking to expand their extension area in order to increase their overall mining prospects.
So why are their shares going through such rough surges? Well, it mainly comes down to their earnings.
Deep Yellow are focusing so much on expanding and dedicating their resources to new projects and innovations in drilling technology, they merely have not been turning over a profit.
They are making solid earnings and seeing successful results, however they are spending more than they are earning. So it probably comes as no surprise to them that their shares are declining at such a rate.
Their new strategy is primarily focused on growing existing uranium resources across their most recent projects in Nambia. They seem to be focused on the long-term as many expansion implementations are taking place and will prove to be costly over time.
What’s their future strategy?
Deep Yellow are very much focused on branching out their business by kick starting new projects in different countries.
They know where they stand and how solid their profits are from previous projects, and as a result they’ve decided to take that step further and expand their portfolio.
Deep Yellow want to maintain their solid uranium mining history, as many competing mining companies have been faced with protestor’s and various other complications which has somewhat put a spanner in their works.
Their good name could see them through a variety of prospects in new areas.
Publisher, Money Morning