Best of the Week
Most Popular
1.Canada Real Estate Bubble - Harry_Dent
2.UK House Prices ‘On Brink’ Of Massive 40% Collapse - GoldCore
3.Best Cash ISA for Soaring Inflation, Kent Reliance Illustrates the Great ISA Rip Off - Nadeem_Walayat
4.Understanding true money, Pound Sterling must make another historic low, Euro and Gold outlook! - Marc_Horn
5.5 Maps That Explain The Modern Middle East - GEORGE FRIEDMAN
6.Gold Back With A Vengeance As Bitcoin Bubble Bursts - OilPrice_Com
7.Gold Summer Doldrums - Zeal_LLC
8.Crude Oil Trade & Nasdaq QQQ Update - Plunger
9.Gold And Silver – Why No Rally? Lies, Lies, And More Lies - Michael_Noonan
10.UK Election 2017 Disaster, Fake BrExit Chaos, Forecasting Lessons for Next Time - Nadeem_Walayat
Last 7 days
Warning: The Fed Is Preparing to Crash the Financial System Again - 21st Jul 17
Gold / Silver Shorts Extreme - 21st Jul 17
GBP/USD Bearish Factors - 21st Jul 17
Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing - 21st Jul 17
Is It Worth Investing in Palladium? - 21st Jul 17
UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - 21st Jul 17
The Fed May Show Trump No Love - 20th Jul 17
The 3 Best Asset Classes To Brace Your Portfolio For The Next Financial Crisis - 20th Jul 17
Gold Stocks and Bonds - Preparing for THE Bottom - 20th Jul 17
Millennials Can Punt On Bitcoin, Own Safe Haven Gold For Long Term - 20th Jul 17
Trump Has Found A Loophole To Rewrite Trade Agreements Without Anyone’s Permission - 20th Jul 17
Basic Materials and Commodities Analysis and Trend Forecasts - 20th Jul 17
Bitcoin PullBack Is Over (For Now): Cryptocurrencies Gain Nearly A 50% In Last 48 Hours - 19th Jul 17
AAPL's 6% June slide - When Prices Are Falling, TWO Numbers Matter Most - 19th Jul 17
Discover Why A Major American Revolution Is Brewing - 19th Jul 17
iGaming – Stock Prices - 19th Jul 17
The Socionomic Theory of Finance By Robert Prechter - Book Review - 18th Jul 17
Ethereum Versus Bitcoin – Which Cryptocurrency Will Win The War? - 18th Jul 17
Accepting a Society of Government Tyranny - 18th Jul 17
Gold Cheaper Than Buying Greek Villas in 2012 - 18th Jul 17
Why & How to Hedge the Growing Risks of Holding Stocks - 18th Jul 17
Relocation: Everything You Need to do for a Smooth Transition Abroad - 17th Jul 17
A Former Lehman Brothers Trader: It’s Time To Buy Brick And Mortar Retailers - 17th Jul 17
Bank Of England Warns “Bigger Systemic Risk” Now Than 2008 - 17th Jul 17
Bitcoin Price “Deja Vu” Corrective Sequence - 17th Jul 17
Charting New Low in Speculation in Gold and Silver Markets - 17th Jul 17
Bitcoin Crash - Is This The End of Cryptocurrencies? - 17th Jul 17
The Fed's Inflation Nightmare Scenario - 17th Jul 17
Billionaire Investors Backing A Marijuana Boom In 2017 - 17th Jul 17
Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - 17th Jul 17
Gold and Silver Biggest Opportunity Since Late 2015, Last Chance at These Prices - 17th Jul 17
Stock Market More to Go - 17th Jul 17
Emerging Markets & Basic Materials Stocks Breaking Out Together - 16th Jul 17
Stock Market SPX Uptrending Again After Microscopic Correction - 15th Jul 17
Global Currency Reserve At Risk - 14th Jul 17
Picking Great Gold Stocks - 14th Jul 17
BBC Tree Expert's Verdict on Sheffield Amey / Labour City Council Tree Felling's - 14th Jul 17
SPX Cycles, Fed Funds and Gold - 14th Jul 17
Should Platinum Be More Expensive Than Gold? - 14th Jul 17
What's Next for US Dollar, Stocks, Bonds and Gold? - 13th Jul 17
India Gold Imports Surge To 5 Year High – 220 Tons In May Alone - 13th Jul 17
Gold and Silver: Your Stomach Is Probably Wrenching Right Now - 13th Jul 17
Gold Industry Is In A Deep State Of Dysfunction, Delusion And Denial - 13th Jul 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

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