Trent Barnett Hartleys
SPEC BUY Paladin Energy (PDN) $0.21 We estimate uranium prices will need to recover to at least $US50/lb over the next two to four years to allow global supply to meet demand. PDN offers the most liquid play on uranium prices listed on the ASX and with no contracts in place offers 100 per cent exposure to a further recovery in prices. With two developed assets now in care and maintenance, PDN is in a strong position to secure the contracts required to underpin the restart of one or both of its mines, but a further recovery in uranium prices is crucial. BUY Lycopodium (LYL) $4.60 We have recently commenced coverage of LYL, a well-managed provider of engineering and project management consultancy services to a range of industries, primarily focused on resource projects in Australia and overseas. With a solid outlook, particularly for the gold sector in WA and Africa, we believe LYL is well placed to continue delivery of earnings growth over the next few years. LYL has a strong balance sheet (about $73 million net cash) and has consistently paid a strong dividend, equivalent to about 65 per cent of earnings.