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« Japan edges back towards nuclear power with vote to restart reactors | Main | The Better Short: Gold or Silver? »
Thursday
Oct232014

Are Uranium Stocks Being Unfairly Punished?

Henry Bonner


Uranium stocks are becoming collateral damage in the sell-off in oil over the last couple of months. Since mid-July, oil is down around 20% from $102 per barrel to $83 as of October 201. This has also become a problem for many uranium stocks. Uranium Energy Corp. is down around 27% in the three months ending October 20,2 Fission Uranium Corp. has lost over 30%,3 and big uranium producer Cameco Corp. is off 20% in the same time frame.4

‘I guess the market thinks you can put oil in a nuclear reactor,’ said Steve Todoruk, who joined Sprott Global Resource Investments Ltd. in 2003.

I protested: ‘couldn’t cheap oil reduce demand for nuclear power?’

Steve explains why he doesn’t think that’s the real explanation:

During the first seven months of the year, oil stocks were the darlings of the market, and many investors were recognizing significant gains on their oil positions.

During most of that time, uranium prices continued to fall, eventually bottoming out at $28 per pound5, and uranium stocks were generally hated.

Read more....

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