The ETF That Follows The Nuclear Industry Is About To Experience A Breakout

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February 25, 2010 6:19pm ETF BASIC NEWS NYSE:NLR

nuclearThe nuclear industry is about to experience a breakout, and it’s going to be a major investment opportunity. Lately, I’ve been talking with people in the nuclear business, from uranium miners


 to reactor designers to government minders and check signers. Everything I’ve heard leads me to believe that 2010 will be a good year – finally – for the nuclear industry. Whether you want to look just at home in the US or all around the world, the nuclear story is good and getting better. The main use for nuclear power is to generate electricity. Let’s start with a look at how the world generates its electricity. There are 436 operating reactors in 30 countries around the world, 104 of which are in the US. These reactors produce just shy of 15% of the world’s electricity. The best data are that 50 reactors are currently under construction. There are 137 more being formally planned, and another 295 reported proposals seeking construction approval,” Byron King Reports From Howe Street.

And what about China and its nuclear ambitions? According to an article in the Dec. 16, 2009, edition of The New York Times, “China is preparing to build three times as many nuclear power plants in the coming decade as the rest of the world combined.” According to the Times, China’s “civilian nuclear power industry” (and rest assured there’s a Chinese military nuclear power industry as well) has 11 operating reactors, with as many as 10 new reactors per year planned for the next 15 years. That’s 150 new reactors just in China.

King goes on to say, “So where will the world nuclear industry obtain the uranium fuel for all these new reactors? That’s a darn good question. Just in the US, annual uranium use for the nuclear power industry is about 55 million pounds. The US produces less than 4 million pounds of this fuel – about 7% – and imports the rest. But despite the large US demand for uranium imports, the world uranium mining industry lacks adequate capacity to meet demand. A large amount of the nuclear fuel imported into the US comes from decommissioned nuclear warheads from Russia. The warheads trace their origins back to the Soviet Union. If you thought the US had a problem with imported oil, now you know that there’s an issue with uranium fuel as well. Of course, I’m not the only one who knows this. It’s a national security issue, and I can tell you that things are about to change in a very big way.”

“Both the mining and purchasing communities agree that the price of uranium is headed upward in 2010. The reason is that the Russians are running out of old warheads and utilities are back in the market for more supply. The near-term viewpoint is that we’ll see uranium oxide prices in the mid-$60s during 2010. Prices will trend even higher over the medium term, with some forecasters predicting $250 and higher over the long term. All indications are that there is a great investment play here. It’s time to get in, and I believe we’re getting in near the bottom. Here’s what to do. Take a position in the Market Vectors Nuclear Energy ETF (NYSE:NLR),” King Reports.

See The Full Story: HERE 

Here are some details on the Market Vectors Nuclear Energy ETF (NLR) below:

The investment (NLR) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal Nuclear Energy index. The fund normally invests at least 80% of total assets in equity securities of U.S. and foreign companies primarily engaged in the nuclear energy business, which derive at least 50% of their total revenues from nuclear energy business. Such companies may include small- and medium capitalization companies. It is nondiversified.

Fund Holdings as of 2010/02/24  
Number Holding Ticker Shares Market Value % of net assets
1 Mitsubishi Heavy Industries Ltd (7011 JP) 3,988,806 $14,806,078.44 8.61%
2 Constellation Energy Group Inc (CEG) 420,411 $14,609,282.25 8.49%
3 Cameco Corp (CCJ) 468,893 $13,236,849.39 7.69%
4 Exelon Corp (EXC) 281,557 $12,391,323.57 7.29%
5 EDF (EDF FP) 243,897 $12,484,847.81 7.26%
6 Uranium One Inc (UUU CN) 2,840,774 $8,256,024.73 4.80%
7 JGC Corp (1963 JP) 417,874 $7,812,861.15 4.54%
8 Paladin Energy Ltd (PDN AU) 2,297,325 $7,659,346.44 4.45%
9 Areva SA (CEI FP) 15,720 $7,100,206.74 4.13%
10 Uranium Participation Corp (U CN) 1,201,029 $7,049,443.65 4.10%
11 Fronteer Development Group Inc (FRG CN) 1,664,765 $7,035,999.86 4.09%
12 USEC Inc (USU) 1,578,018 $6,817,037.76 3.96%
13 Energy Resources of Australia Ltd (ERA AU) 397,714 $6,605,601.89 3.89%
14 Denison Mines Corp (DML CN) 4,760,969 $6,466,127.52 3.76%
15 IHI Corp (7013 JP) 3,428,614 $6,049,139.06 3.52%
16 Kajima Corp (1812 JP) 2,471,805 $5,890,040.58 3.42%
17 Taihei Dengyo Kaisha Ltd (1968 JP) 598,376 $5,373,406.07 3.12%
18 Forsys Metals Corp (FSY CN) 1,106,993 $4,268,583.51 2.48%
19 Central Vermont Public Service Corp (CV) 163,860 $3,296,863.20 1.92%
20 First Uranium Corp (FIU CN) 2,337,878 $2,886,543.26 1.68%
21 Toshiba Plant Systems & Services Corp (1983 JP) 227,700 $2,788,713.88 1.62%
22 Uex Corp (UEX CN) 2,698,611 $2,716,808.49 1.58%
23 Hathor Exploration Ltd (HAT CN) 1,207,624 $2,397,126.18 1.39%
24 Cash   217,305 $217,305.75 0.13%

Chart for Market Vectors Nuclear Energy ETF (NLR)

 

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