May 08 2009
Dennison Mines; Time to Buy?
Fans of Denison Mines were ecstatic in early December when they could pick up this little known silver mining company for $.54 a share. The smart ones loaded up their portfolio with as many shares as fast as they could. The result was a fast recovery and big profits for investors. Today the stock has been hovering between $2.00 and $2.50.
But financial gurus still encourage people to load up on the stock. Why? The price of silver has been slowly edging upward, and Dennison stands to become a takeover target or have a stock rise over time due to profitability. Even though the stock has skyrocketed, it still is considered a grab.
To understand that thinking, it would be worth noting that the stock used to be stable at $7 /share and had at one time climbed all the way to $13/share. This was before the company had even made a profit. Now that it is profitable, the company should look even more exciting to investors.
There are always concerns. Morningstar still has the stock listed with a negative P/E ratio. So even though the company showed a profit for the first time a couple of years ago, the drop in value of silver during the last quarter of 2008 made profitability sink. Now that the price of silver has gone back up, profitability should hopefully retain back in.
Insiders are not trading right now, so it might be worth buying on dips if this is a stock you want to add to your portfolio. Howard Ruff, the long time financial analyst, urges people to buy silver stocks to hyperspeed their portfolio. Denison is one of many good small stocks to help beef up a solid portfolio.
