On Tuesday, H.C. Wainwright initiated coverage on United States Antimony Corporation (NYSE:UAMY) with a Buy rating and a price target of $2.50. The stock has shown remarkable momentum, delivering a 550% return year-to-date and a 65% gain in the past week alone, according to InvestingPro data. The firm highlighted UAMY's longstanding presence in the industry, dating back to its establishment in Montana in January 1970. Initially, UAMY's operations were centered around mining and producing antimony.
Despite ceasing domestic antimony mining in December 1983, UAMY continued to manufacture antimony products by processing ore sourced from foreign locations. In a strategic move to diversify its portfolio, the company founded Bear River Zeolite (BRZ) Company in 2000, which focuses on mining and producing zeolite in Idaho. InvestingPro analysis reveals the company maintains a healthy financial position with a current ratio of 6.24, indicating strong liquidity to meet short-term obligations.
The firm's recent advancements in August 2024 are particularly noteworthy. UAMY acquired mining claims in Alaska and Ontario, Canada, which significantly bolstered its reserves of critical minerals. These acquisitions are seen as a substantial enhancement to the company's asset base and a testament to its growth strategy in the mining sector.
H.C. Wainwright's analyst cited UAMY's storied history as the sole domestic producer of antimony products in the United States. The firm's ability to adapt by sourcing materials internationally and expanding into zeolite production was also emphasized as a positive indicator of its resilience and versatility in the industry.
The analyst's Buy rating and the $2.50 price target reflect confidence in UAMY's potential for growth and its strategic positioning within the market for critical minerals. The rating suggests that H.C. Wainwright sees a favorable outlook for the company's stock performance in the foreseeable future.
InvestingPro data shows revenue growth of 28.4% in the last twelve months, though the company currently operates with negative gross margins. Investors can access 12 additional ProTips and comprehensive analysis through InvestingPro's detailed research reports, available for over 1,400 US stocks.
In other recent news, United States Antimony Corporation reported a 23% sales increase to $8.1 million for the first nine months ending September 30, 2024, alongside a 107% rise in gross profit to $2.2 million. The company's cash and cash equivalents improved from the previous year, standing at $12.97 million. In response to global market constraints, US Antimony has initiated strategies including purchasing mineral claims and engaging with U.S. government officials for potential sales and funding.
The company is also negotiating contracts to secure new antimony supplies, due to China's increased restrictions on rare earth minerals. Furthermore, US Antimony is enhancing its investor relations efforts to improve visibility and engagement with institutional investors. However, the company faced a gross profit decline of $255,000 in its zeolite business due to higher maintenance costs, and it incurred a loss from discontinued operations in Mexico.
Looking ahead, US Antimony is focused on producing antimony material by 2025, targeting high-grade deposits to minimize costs. It is also in negotiations with major firms for a 100% domestic supply of antimony products, in line with a government executive order.
The company is preparing for an increase in demand for domestic antimony supplies by 2027 and is exploring potential government grants and collaborations.
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