Monday, April 18, 2011

USEC (USU) (URRE) (PDN) (SO) Trade Up as Nuclear Rebounds

Shares of uranium and nuclear companies like Paladin Energy (TSE:PDN), Uranium Resources, Inc. (NASDAQ:URRE), Southern Company (NYSE:SO) and USEC Inc. (NYSE:USU) are rebounding after the initial shock of the nuclear challenges in Japan from the earthquake are gradually winding down.

The headline nonsense that somehow the nuclear sector was going to be cut and replaced by other so-called "green" energy is ludicrous, as solar and wind turbines are a poor and unpredictable source of energy, and will never be able to supply, or come close to supplying the growing energy needs of the world.

While it's obvious the industry will go over safety measures to ensure the highest levels possible, to use a rare occurrence like an 8.9 earthquake as the worst case scenario isn't going to happen, even though the industry will be safer and better for making any improvements they can.

USEC Inc. closed Friday at $4.43, gaining $0.08, or 1.84 percent. The Southern Company closed at $38.33, rising $0.49, or 1.29 percent. Uranium Resources, Inc. closed at $2.01, up $0.08, or 4.15 percent. Paladin Energy closed in Toronto at $3.72, increasing $0.07, or 1.92 percent.

2 comments:

Anonymous said...

Monday, the trading day after this post, USEC lost 2.27% more than wiping out Friday's gain, and USEC is down again on Tuesday.

USEC is trading at around $4.25, near its all-time low of $3.01, and off its high of nearly $24 in May 2007. Obviously it did not require Fukushima to send USEC into a tailspin. USEC has been a disaster since the company was privatized.

And the future of nuclear energy has nothing to do with it, as USEC faces a cutoff in supply and production between 2012 and 2013.

Dave Wane said...

Whilst I accept there will be strong demand for Uranium in the medium to long term, I wonder whether there may also be an oversupply situation in the same period - putting downward pressure on the Uranium price and therefore share prices. Spot price producers like Paladin may be better off.