The recent price retraction of the price of uranium presents a great opportunity to get into this precious resource.

Uranium is a commodity of the future, for these reasons:

1. Uranium is environmentally friendly. A recent Business Week article has shown that green companies have been holding up well during this bear market and uranium releases lower carbon emissions and is considered much cleaner than coal.

2. Nuclear power is becoming a viable option in place of coal. John McCain wants to build 45 new nuclear facilities by 2030 and fund it with 2 billion dollars. Nuclear energy currently provides 15% of the world’s electricity. Another 25% increase in nuclear power plants is under construction or in the planning phase.

3. Supply and demand favors the uranium boom. There is currently a 67 kt/year demand but only a 42 kt/year supply. Furthermore, much of the supply is from old mines and plants with depleted resources. Many European countries have run out of uranium creating an even larger gap.

4. Uranium related company stock prices have been deflated dramatically and the cheap forward PE makes most a compelling buy. Some companies that one should watch out for are CCJ, DNN, USEC, URZ, BHP, NRG, URRG RTP, USEG, USU

I’m not convinced that uranium prices have bottomed out yet especially in a bear market that still hasn’t seen its trough. I do support getting in, but would wait out the storm to see a better timetable.

Uranium prices up to April 08

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