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USEC Might be Derailed Tomorrow by a Seeking Alpha Article (USU)

USEC, Inc. (NYSE: USU) was up another 51 percent Monday to close at $29.02 but Tuesday could get ugly after a Seeking Alpha article was published that advises readers to take profits in the stock now.

USEC is a uranium refiner which, on Monday, announced that it was entering phase seven of a centrifuge project and had secured another $30 million in funding from the Department of Energy. This news, and the continued hopes that Japan will bring its nuclear power plants back online have caused the stock to gain 300 percent in the past week and 500 percent in the past two weeks.

But according to this Seeking Alpha article, investors should get out of USEC and be happy with their profits because the stock is likely to head to around zero.

The author cites a few reasons.

1) The centrifuge technology being developed is already outdated and is nothing more than a political pet-project.

2) It’s uranium enrichment facility in Kentucky was its only real source of income aside from the centrifuge research. This facility was taken offline in May.

3) Company insiders have purchased no stock in the company they run.

This article has made its way into the USEC news cycle since very little news has been published to explain the move in the stock. Seeking Alpha articles such as this have a well-documented history of causing big moves in small-cap stocks. (Check out our article published today on Soul and Vibe.)

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Disclosure: At the time of this writing, the author had no position in the company mentioned.

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