6 Uranium Stocks Poised for a Rebound


Michael Smedley Image Michael Smedley Director and Chief Portfolio Officer, Canadian General Investments and Morgan Meighen &

In the aftermath of Japan’s tsunami-induced meltdown at the Fukushima nuke plants, investors have shied away from nuclear-related investments. Bbut it was just a matter of time before the sector was revisited, and that time is fast approaching, writes Michael Smedley of Investor’s Digest of Canada.

My prediction for December has been borne out. Investors are once again making money in depressed resources stocks.

Now, because I like to be one of the first to take advantage of new trends, I’ve cottoned on to the blighted uranium sector. I’ve concluded that uranium recently formed a price base of roughly $52 a pound—$26 below where it was before the tsunami hit Japan’s Fukushima nuclear power plant last March.

Moreover, the metal has already been buoyed by better prices on both the spot and contract markets. That uranium has been on the upswing became clearer when I heard Nick Carter speak late last year at a Toronto conference organized by Scotia Capital.

Carter, a top official with a US mining consulting firm, is a laid-back type of guy, not given to heavy-duty promotions. But his comments made me realize that the metal with the least downside risk—short of another nuclear accident—is uranium.

For starters, uranium now supplies 14% of the power base load worldwide—something it should continue to do. And although politicians everywhere have jumped on the anti-uranium bandwagon over the last few months, Carter thinks few will likely remain on board.

Instead, he sees more countries joining the “nuclear family,” in spite of such challenges as capital costs, safety concerns, and the problem of nuclear waste.