Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
SPX/NDX/NAZ Hit New All-time Highs - 27th May 17
GBPUSD Top in Place, GOLD Price Ready to Rocket? - 27th May 17
Silver Mining Stocks Fundamentals - 27th May 17
BBC Newsnight Falls for FAKE POLLS, Opinion Pollsters Illusion for Mainstream Media to Sell - 27th May 17
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Investors Go Nuclear, Time to Invest in Uranium Stocks

Commodities / Uranium Jul 11, 2012 - 03:43 PM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticleGS Early writes: Ah, what a difference a year makes.

Just a couple weeks ago it was reported that a Japanese town recovering from the last year's tsunami-inflicted Fukushima disaster is teaming up with Toshiba Corp. to build several solar electricity plants that combined could be Japan's largest solar facility.


The coastal town of Minami Soma plans to install 100 megawatts of solar, which would be about 2% of the 4.7 gigawatts of capacity at the now idle Fukushima Daiichi nuclear station 16 miles to the south.

If you recall, a huge earthquake triggered an even bigger tsunami that laid waste to northeastern Japan, including three aging nuclear reactors. Parts of Minami Soma were in the no-go zone following the meltdowns.

After the Fukushima disaster, Japan shut down all of its 54 nuclear power stations.

But the lesson here isn't really about how Japan has seen the light (pardon the pun) and is going to replace all its nukes with solar, geothermal and wind.

No, the hidden news peg in all this is most people have put the disaster behind them and now are getting back to business as usual.

And whether the Japanese restart their nukes or not, it's immaterial. Nuclear energy is a clean fuel of the future for developing nations around the world and in particular, China and India.

That means big things for uranium producers, big things for the biggest uranium player, Cameco Corp. (NYSE: CCJ) - and big things for those investing in uranium stocks.

Going Nuclear
U.S. investors have been far too focused on nuclear's old reputation, when it took forever to build a plant and then you were never sure how well it was built. Things have changed considerably since those days.

But the U.S. utilities and regulators are still having a hard time finding common ground. There's only one new reactor under construction and nine in advanced stages of planning.

In China, however, there are 27 reactors under construction and 50 additional reactors in advanced stages of planning.

India has 20 reactors in six power plants with at least seven in planning mode. Its goal is to triple its nuclear power from 3% to 9% of overall electricity generation capacity in the next 25 years.

By 2020, India's installed nuclear power generation capacity will increase to 20,000 megawatts from around 4,800 MW today.

The International Atomic Energy Agency's (IAEA) most realistic estimate is that 90 new nuclear plants will enter service around the world by 2030. Ten new nuclear plants went online over the past two years.

Simply put, the growth story for nuclear power, much like the growth story for oil and natural gas demand, is centered in the emerging markets.

Investing in Uranium: A Bright Idea
It's no surprise share prices of most uranium producers plummeted in the immediate wake of the Fukushima disaster.

Since then, the group for the most part has traded sideways. There hasn't been much interest in investing in uranium stocks; investors want greater clarity on accident's impact on global nuclear demand growth.

Many countries announced a pause in the construction of new reactors and/or a comprehensive safety audits last March, a process that took time to complete. But recent announcements from China, Japan, India and the UK have affirmed that nuclear power's future remains bright. Germany and Switzerland's decisions to phase out their nuclear power programs shouldn't damage the industry's growth prospects.

While the uranium price is lower than it was immediately prior to Fukushima, it's important to remember that it is at a higher level than in mid-2010, which was only six months before Fukushima.

The main things keeping a brake on uranium prices now are the current supply-demand balance and also some residual uncertainty regarding Japanese reactor restarts and the issuance of new reactor licenses in China, which were suspended after the Fukushima accident.

Experts are now saying that we could see some positive news on both fronts in the not-too-distant future. It looks increasingly likely that Japan will begin to restart reactors. Local opposition to reactor restarts was overcome last month, and the government appears to be getting closer to a restart decision.

In China, some nuclear regulators have come out publicly over the course of the last few months, saying that they will begin to issue new reactor licenses again. And at the beginning of June, the Chinese cabinet reportedly reconfirmed the country's commitment to its nuclear program.

Uranium Stocks: Cameco's Comeback
Cameco Corp. (NYSE: CCJ) is the largest pure-play miner of yellowcake and is a must-own for investors interested in profiting from rising demand for uranium.

On May 1 Cameco reported a 43% surge in first-quarter profit to $131.8 million. During the first quarter, the company sold 8.1 million pounds of uranium at an average realized price of $49.40 per pound. That compared with sales of 6.1 million pounds at an average realized price of $48.60 per pound in the first three months of 2011. The company's sales rose 22% to $562.3 million.

And Cameco has a strategy to double its production by 2018. To accomplish that there may be some acquisitions in the company's future. With prices flat-lined until demand picks up and smaller miners getting stretched over the past year, this may be the perfect time to snap up productive properties and eliminate some of the competition simultaneously.

Also, Cameco has a series of major projects underway. The largest is the long-delayed Cigar Lake mine in Canada. The company expects the facility to produce about 1 million pounds annually from the mine by 2013. The mine's annual output could hit 5.6 million pounds by the latter half of the decade.

Cameco is in prime position to fuel the next generation of nuclear reactors and score some big gains in the process. It's a "Buy" up to $28.

Source :http://moneymorning.com/2012/07/11/investing-in-uranium-stocks-time-to-buy-the-industrys-biggest-player/

Money Morning/The Money Map Report

©2012 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife