NEW YORK (TheStreet) -- Shares of Lightbridge (LTBR) - Get Lightbridge Corporation Report were gaining 17.1% to $1.24 on heavy trading volume after the nuclear energy company announced that it signed a comprehensive nuclear services agreement with CanadianNuclear Laboratories.
The agreement covers the fabrication of Lightbridge's patented next generation metallic nuclear fuel test samples at Canadian Nuclear Laboratories at Chalk River, Ontario.
The agreement provides the framework to proceed with Phases 2 and 3 of the test fuel sample fabrication at the facilities the two companies envisioned when they signed an initial cooperation agreement in October 2014.
"With this agreement with Canada's premier nuclear science and technology organization, Lightbridge has put in place the last key enabling agreement to execute our critical path work scope relating to research reactor irradiation under prototypic commercial reactor operating conditions," Lightbridge President and CEO Seth Grae said in a statement.
About 2.6 million shares of Lightbridge were traded by 10:08 a.m. Monday, well above the company's average trading volume of about 137,000 shares a day.
TheStreet Ratings team rates LIGHTBRIDGE CORP as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate LIGHTBRIDGE CORP (LTBR) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for LIGHTBRIDGE CORP is currently extremely low, coming in at 7.38%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -496.97% is significantly below that of the industry average.
- LTBR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 55.38%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Professional Services industry and the overall market, LIGHTBRIDGE CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- LTBR, with its decline in revenue, slightly underperformed the industry average of 4.8%. Since the same quarter one year prior, revenues fell by 14.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- LIGHTBRIDGE CORP has improved earnings per share by 27.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, LIGHTBRIDGE CORP continued to lose money by earning -$0.31 versus -$0.37 in the prior year.
- You can view the full analysis from the report here: LTBR Ratings Report