Friday, December 6, 2013

The future of the uranium market melting away



Of course, the nuclear lobby is well-heeled and has its silver-tongued apologists who will do their best to discredit such stories. Beyond the despicable aspects of this, you should consider, from an investment point of view, the risk that the industry loses control of the public relations battle as more stories emerge – and legal consequences ensue……uranium stocks are a no-go as a long-term investment. 
Meltdown Coming? The Uranium Story You Haven’t Heard Money burial.uranium-industryMorning 

27 November 2013 by Chris Mayer “……

You remember the nuclear disaster at Fukushima? It was a horrible human tragedy that is still playing out – and in ways I am sure you will be surprised to learn.

The disaster also set back the so-called nuclear renaissance that was then in swing. Uranium prices fell like a piano tumbling down a flight of stairs, only recently crashing down to five-year lows and laying waste to uranium stocks.

But it’s been over two years since the meltdown at Fukushima, and memory is short.

Here is Barron’s over the weekend, on its optimistic appraisal of Cameco, the world’s largest publicly traded producer of uranium:
Cameco shares recently rallied after stronger-than-expected third-quarter earnings, but are still flat for the year. They fetch just 15.2 times what the company has earned, well below its decade median of 24 times, and the low-cost producer generated net profit margins near 22% even when uranium prices slumped. Improving prices can only energize the stock.
Among the ‘reasons for optimism‘, Barron’s included ‘gradual progress toward the cleanup in Japan‘.

Barron’s piece inspired me to write to you today. As a long-term investor, I am not tempted – at all – by the apparent bargain in uranium stocks. Read more »