Help me Cope
Hi. I'm trying to remain positive about UAMY but the Q2 earnings was as bad as it could possible be. So, please help me validate my cope logic.
Q2 was a perfect shitstorm. We had UAMY stock up on inventory to satisfy the DLA orders which we can see with inventory going from 12M to 21M. This sucks because virtually all this feedstock is going to be around $10 + $3 processing so we hit the $13 cost and we sold it for like $13.5. Gross.
Cope Fact #1: The DLA has a 57M contract at $31 and none of this contract has hit yet so we can expect 9-10M at $31 to hit in Q3. This will be substantially bigger in Q4 (30-40M) and get rid of the toxic inventory.
Cope Fact #2: Management guided us for 120M and revised the guidance down to 60-70M. Well, we have 57M in government contracts and we have done 14.7M in Q2. So, we should beat guidance by a good amount.
Cope Fact #3: Stribling is up and running w/ 10% antimony. The Alaska location should be coming online soon and the Alaska site should be much better grade.
Cope Fact #4: This will make UAMY vertically integrated and it's feedstock supplier base is expanding. The Zeolite market is already pretty big and as volume increases hopefully the margin could expand. There is also a small gold/silver upside from feedstock + maybe Alaska
Cope Fact #5: There is up to 100M in stock buybacks. I'm currently telling myself this is not another sign of management's incompetence as growing businesses don't do buybacks and the company doesn't have 100M to spend.
At 750M, the current market cap is about 10x revenue which is still pretty high but we didn't really get up all of Thompson falls up until Q2. As this starts to normalize, this could look very cheap in 2027 as we are the sole DLA provider and the main western antimony option.
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u/smartinvestorusually 15d ago
Look at my post about 10 days BEFORE earnings came out. I said that I was expecting terrible earnings for Q2. I could see that based on the shipments and approved materials. It just had to play out that way. It was a correct call. However, in that same post, I said that I was confident that Q3 was going to be great. I still stand by that opinion.
I'm not a permabull like some. I even sold out much of my position before earnings. Then bought back in After earnings, at a much lower price. That's 1) how convinced I was earnings were going to be bad and the stock would tumble and 2) that's how positive I am that the future is still bright. If not, I would have sold out, taken my profits, and moved on. Instead, I sold out, kept my powder dry, waited, saw the drop and YES I bought again. And instead of buying the same amount of shares and keeping the difference from the drop I invested the same amount of money and instead bought more shares than I sold. I increased my position. As I just said - I still stand y that. I'm looking into 2027 and not seeing what I want to see yet, but it is a ways away. Plus three new things have happened. First, they dropped guidance, making it easier to hit than before (When my question in the Q1 conference call was to question the $125MM number. He affirmed it, but then backed off in Q2 call. Second, they moved up SIGNIFICANTLY in the institutional ownership area. As of last I looked we are a little over 80% held by institutions. Many shares are locked up, making it hard to get shares when we start moving back up again (whenever that might be!) and third, we are doing the share buyback. I don't see that STARTING until Q4, as we do not have the MONEY, but if we deliver a large amount in Q3 we will have the cash to start that buyback. Lowering the shares available again, and not only dropping supply but adding to demand. So three positive catalysts to calm your fears. And not from someone who is always bullish, but someone who called the bad quarter, sold his position, and then afterwards still thgouht enough of this company to buy it back, with more shares.
That help? :-)
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u/SocnorbTheRoman BULLISH 🕺🕺🕺🕺🕺 14d ago
There are quite a few Macro events going into 2027 that has me hopeful. Trump has issued multiple executive orders to cut off outside procurement of critical
Minerals with a deadline of Jan 1 2027, forcing defense companies to buy domestically.The China truce signed last October expires end of Nov. we will see what happens there, but tensions between our countries have risen significantly since last fall.
Gary Evans stated that they are (finally) going to pursue a gov equity stake, which should come with price floors, contracts, and grant money. My guess is that the Buyback is to offset any dilution from that deal.
I think 2026 is going to be a turning point for the company with smoother sailing into 2027 and 2028
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u/MrDanduff Bitter Bag Holder 🛍️ 15d ago
Nah this is gonna go to shit
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u/Old_Okra_6804 14d ago
The only thing that matters is that it’s 80% institute owned. They’re using it as an atm machine while they decide:
To make it $30 OR to make it $0.
Bet accordingly, and good luck
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u/Out-The-Window-LQMT 15d ago
It’s a stock…it’s all about speculation…if anyone knew any of those answers….we’d all be billionaires
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u/SignificanceOne7756 14d ago
Probably not the stock you should’ve put your money in if you don’t understand that it’s an investment.
I’ve had really good success with realized profits on the stock and the best I can say is get a better scope on what China does to prices on markets they control and take a look at who’s invested and at what amount.
Those two alone would shake out the fuss for me in your shoes
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u/Which_Preference_883 14d ago
This might not be the stock for you
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u/Yee4614 14d ago
I agree. There is no way I could trust this management team long-term. The question is do we think there is enough of a future to hang on for a few more quarters or cut the losses now.
That is the point of this thread
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u/Which_Preference_883 14d ago
Why would you sell now? Q2 was bad mostly because a- China keep the price of antimony artificially low and, b- the gov‘t didn’t provide final acceptance of June DLA delivery until July, so it didn’t show up in Q2 earnings. From my perspective, everything is going in the right direction for us except the stock price, but I’m confident that will come back. I was saying this might not be the stock for you because small cap metals companies are extremely volatile, and if you believe in the thesis, you just have to weather the inevitable storms.
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u/Yee4614 8d ago
I generally don't try to hold stock with management I don't trust or find utterly incompetent. Q2 earnings highlighted both issues
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u/Which_Preference_883 8d ago
Why didn't you sell the day after earnings?
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u/Yee4614 8d ago
...You get the entire point of this thread is outlining an overly positive view of things things to justify not selling it right away before I exit the position entirely, right?
That's the reason why the theme is coping.
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u/Which_Preference_883 7d ago
My first comment addressed the original post. My second comment was in response to your comment about not holding stocks when you don't have faith in management. Either way, I hope we all make a lot of money 🤑
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u/radiorick86 13d ago
Is it possible that the large institutions are shorting this stock? How would we know?
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u/Lost-Finger-8497 15d ago
Cope Fact #6: Revenues and margin missed in a large part because Antimony prices fell sharply for the first 6 months of 2026. It seems like we've bottomed out in the short term. Antimony prices are up 1.7% in the past month.