Uranium Sector Showing Some Signs Of Life (URA, NLR, URRE, DNN, CCJ, URZ, UEC)
Don’t look now, but the uranium sector is actually showing some signs of life. After going into a near free fall shortly following the catastrophic events in Japan, uranium prices have stabilized. Equities linked to the commodity have recently seen a push higher.The Euro’s Demise Has Been Set in Motion: Are you protected?
"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."
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Regardless of what the pundits say, nuclear power remains the cleanest, safest and cheapest form of mass power generation available. And, long-term demand remains intact.
Yes, Germany’s recent political grandstanding caused some volatility in the uranium market, but realistically; where do they plan on acquiring the power to replace the 22 percent that nuclear energy provides the country? Solar panels, windmills, coal – I don’t think so.
With 180 million pounds of uranium required to meet current worldwide demand Germany represents only 5 percent of the demand market – and will only be 3 percent by 2020.
Meanwhile, 61 reactors in 16 countries are currently under construction.
Even if long-term demand is lower by 5 to 10 percent over the next ten years, the World Nuclear Association (WNA) still expects demand for uranium will outstrip supply, particularly as low uranium prices potentially defer even more mining projects.
The most direct way to profit from the recovery in nuclear energy and the shortage in uranium is to buy shares in the most productive uranium miners in the world. Cameco (NYSE:CCJ), Denison Mines (AMEX:DNN), Uranium Energy (AMEX:UEC) and Uranerz Enrgy (AMEX:URZ) are a few of the top names in the sector that are trading well below their net asset values.
As I stated in this letter over a month ago, the tragedy in Japan, and subsequent fear in the market, has presented us with the opportunity to invest in several well-managed and fundamentally sound uranium companies. For well-informed investors with the patience to tolerate volatility for a couple of months, I think this could potentially be the single best opportunity to buy and hold uranium stocks.
Invest in uranium stocks now while it is unpopular – because once the nuclear renaissance becomes fashionable again, stocks of companies exploring for, producing, and selling uranium could realistically be 50 percent higher.
I will continue to track the nuclear/uranium story closely and report back to you here in SmallCap Investor Daily. Feel free to send in questions, or companies, that you would like me to discuss. My address is editorial@smallcapinvestor.com.
Written By Ian Wyatt From Small Cap InvestorWyatt Investment Research is led by founder Ian Wyatt, who serves as Publisher and Chief Investment Strategist. Our team also includes a group of talented research analysts and editors who aim to uncover great investments and present those investment ideas to our growing group of loyal subscribers.
Ian Wyatt is an active investor, a well-regarded investment expert and an Internet entrepreneur. He is the Chief Investment Strategist at Wyatt Investment Research, and plays a leading role in each of the company’s investment newsletters and trading services. As a well-regarded market expert, Ian has written for Marketwatch, Zacks Investment Research, Seeking Alpha, Yahoo! Finance and The Burlington Free Press. He has been interviewed or quoted in articles in well-known publications including AOL Finance Blogging Stocks, Kiplinger’s Personal Finance Magazine, Barron Magazine, Barrons.com, Forbes.com, The Dick Davis Digest, The Dick Davis Income Digest, The Wall Street Transcript, TheStockAdvisors.com, Money Show Digest, The New Jersey Star Ledger, The Wisconsin State Journal and The Seattle Times.
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