well the big question now is... "what to do? what to do?"i am...

well the big question now is... "what to do? what to do?"

i am not going to sit here and ramp ARU shares to encourage a spree of buying on Monday, but rather will try to paint a balanced view considering the facts and the current market environment.

1. BUY/Hold ARU for your entitlement and then sell ARU on Tuesday.

Probably the most preferred alternative.

There is no doubt that the ARU price has been pushed up in anticipation of this event. Assuming a NUP price of $0.80 on open, we have about 27cps on the ARU price to drop. (90c - 27c = 63cent target).

Day traders will no doubt dump their ARU stock upon receiving their NUP entitlements. But do we join them and sell on this news?

It is a matter of asking yourself, what is ARU worth at 63cents and do you think this is cheap?

I strongly believe that the entire NUP episode has been a well needed PR campaign for both ARU and NUP, and has caused ARU to be re-rated in the eyes of many market players out there. Therefore, I think it is wrong to value ARU on its pre-NUP value, simply because the market has now had the chance to realise the value of this stock.

Facts are this: ARU has a massive project with Nolan's Bore, with a JORC compliant HIGH grade uranium resource, which is merely a by-product, and not the key focus of the project. In my mind, buying into ARU at 63cents is cheap, therefore, should the market open at this price on Tuesday, I do not think that I would be getting bang for my buck by selling. Therefore, I will hold. Anything around the 55cent mark, and I will happily be in there on the bid gobbling up some more stock.

ARU is for the long term.

NUP on the other hand, is the "loose cannon", and anything can happen with that one. Facts there are that Laramide is a JV in one of the NUP projects, and you see how the market treats uranium explorer's with a big name next to them. Just take a look at the share price of "NTU" - it is over $1.20, and it hasn't even drilled a hole yet!! (disclosure: I hold NTU)

Therefore, to sell ARU BEFORE your NUP entitlement runs the risk of not being able to get set in NUP at a good price. My view is to ensure that I get my NUP entitlement at a minimum, and then I will be in the driver's seat come NUP listing date to see whether I want to buy more, or sell out. It's not worth leaving to chance in my view, therefore, I will be holding ARU to get my NUP entitlement.

2. Sell ARU on Monday and look to buy NUP on listing.

For the reasons outlined above, this is leaving things to chance.

On the positive side, you are avoiding the risk of having the ARU share price smacked (possibly) on Tuesday, and you can lock in some profits by selling ARU at the high price.

The unknowns of course are: NUP could be trading at any value when it lists, so it may just be too late to get set, and ARU may not be taken back as far as you think, given that it has now been re-rated in the market.

OVERALL:

I favor option 1, as I believe:

a) ARU has a solid project with Nolan's Bore, which is seriously undervalued as a long term play in the market.

b) NUP could open anywhere, given the quality of its uranium tenements and JV with some major players.

For the ultra conservative players: sell ARU on Monday and lock in your profits.

For the conservative players: hold ARU for the NUP entitlement, and re-assess things on Tuesday.

For the riskier players: sell ARU on Monday, and hope like heck that NUP doesn't open too high when it lists.

For the smarter players (IMO): Continue holding ARU, look to buy more if it comes down to an attractive price level, and then take some profit on the table when NUP lists.

Cheers,

PT