Uranium: No Direction Home!
Wednesday, April 2, 2008 at 5:12PM
Uranium Stocks in Uranium
Like a naughty boy sent to stand outside of the classroom uranium is once again being ignored by most of the investment community. Uranium stocks have put in an occasional flurry but still remain a long way off their previous highs.

Uranium Chart 02 April 2008

Thanks to u308.biz for the chart

As the above chart shows the current spot price has slipped once again to now stand at $71/lb. Although we view this as secondary to the longer term uranium price of around $95/lb, it is the spot price that is watched by investors and gets considerable coverage from the media.

As we write we can see that MGA is up 9.9%, URE is up 6.7% and PNP is up 10%. However CCO and CXX have not moved. We get the impression that the current action is more to do with investors trimming and re-arranging their portfolios rather than new money coming into this sector. Some of our readers recently wrote and told us that they have sold their uranium's in order to participate in the bull market that is unfolding in the precious metals arena. When we look at the battering that this sector has taken we have some sympathy with them, however we would question the timing of the move. To move from a sector that is on the floor to one which is on the ceiling just does not fit with our way of thinking, although we do believe that both gold and silver, after this short term pull back, still have a long way to go.

The uranium sector appears to be a victim of fashion, yesterdays wonder horse, however we still need to solve the energy problem before your computer is reduced to a three day week due to rotational blackouts which are not that far away. When the energy companies start talking rotas the penny will drop and the cavalry charge will begin. Until then, rightly or wrongly, we will stay invested in this sector and look to identify possible bargains along the way.

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Article originally appeared on Uranium Stocks (http://www.uranium-stocks.net/).
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