Which of These Stock Should You Own? VelocityShares 3x Long Crude Oil ETN (UWTI), Cliffs Natural Resources Inc (CLF) and Prima Biomed Ltd. (PBMD)
New York, NY – GDP INSIDER – 05/22/2015.
This article discusses three companies: VelocityShares 3x Long Crude Oil ETN (NYSE:UWTI), Cliffs Natural Resources Inc (NYSE:CLF) and Prima Biomed Ltd. (NASDAQ:PBMD)
VelocityShares 3x Long Crude Oil ETN (NYSE:UWTI) increased by close to 10% in trading on Thursday, due to the upward move in oil prices. UWTI fundamentals track oil and we are more positive on WTI and crude over the past week. That said, we are still concerned that supply will continue to outweigh demand and oil will not make a sustainable upward move. With drilling still taking place at over $40 per barrel and increasing production along with it, the price should remain range bound between $55 and $65 per barrel in our view.
Cliffs Natural Resources Inc (NYSE:CLF) was flat in trading yesterday and remains at the bottom of its 52-week range. The company is in a difficult position with relatively unattractive assets and concerns that the global environment for coal and iron ore will remain weak for years to come. With weak iron ore pricing where marginal cost will equal the price of margin production, Cliffs will struggle to break out of the mid-single digits. That said, there is little downside left at this point in our view. The company is seeking creditor protection for assets in Canada currently, and we do not see any positive news on the horizon.
Prima Biomed Ltd. (NASDAQ:PBMD) dropped by almost 50% on Thursday to $3.05. The decrease of $2.86 per share followed a jump of over 270% on Wednesday. The increase followed positive clinical study results. Thursday’s drop following the large increase was just a correction. The Street is trying to sort out the correct valuation for Prima Biomed. Volume was high again with almost 23 million shares trading hands versus the 1.87 million daily average. We expect the positive trial to get more fully digested by the Street and for the shares to move higher over the coming weeks.
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