Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17
The Bitcoin Bubble Explained in 4 Charts - 13th Nov 17
How the US Has Secretly Subsidized China to Produce Eco-Unfriendly Solar Panels - 13th Nov 17
The Increasingly Unstable Middle East Must Be On Every Investor’s Radar - 13th Nov 17
Stock Market Critical Supports are Being Challenged - 13th Nov 17
The One Chart All Investors Should See Before 2018 - 13th Nov 17
Short-Term Stock Market Uncertainty Following Recent Rally, Will Stocks Continue Higher? - 13th Nov 17
Is Hillary Just the “Fall Guy” for the Intel Agencies and their Moneybags Bosses? - 12th Nov 17
Stock Market Correction Phase - 12th Nov 17
Finally, The Fall Of The House Of Saud - 12th Nov 17
Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - 11th Nov 17
E-franc, E-krona... E-volution? - 11th Nov 17
Gold Investment Stalled - 11th Nov 17
Smart Ways to Get Loans Online - 11th Nov 17
What Can Pot Teach Us About Economics and Government? - 10th Nov 17
Can Stocks and Bonds go Down at the Same Time? - 10th Nov 17
Gold Market 2017 Will We See a Replay of 2015 and 2016? - 10th Nov 17
Oil markets turn bullish with shift to backwardation - 10th Nov 17
The Strange Behavior of Gold Investors from Monday to Thursday - 10th Nov 17
Where to Start Your Cryptocurrency Company - 10th Nov 17

Market Oracle FREE Newsletter

Forex Trading Free Week

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

© 2005-2017 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