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Meltdown Coming? The Uranium Story You Haven’t Heard
You remember the nuclear disaster at Fukushima? It was a horrible human tragedy that is still playing out – and in ways I am sure you will be surprised to learn.
The disaster also set back the so-called nuclear renaissance that was then in swing. Uranium prices fell like a piano tumbling down a flight of stairs, only recently crashing down to five-year lows and laying waste to uranium stocks.
But it’s been over two years since the meltdown at Fukushima, and memory is short. Here is Barron’s over the weekend, on its optimistic appraisal of Cameco, the world’s largest publicly traded producer of uranium:
‘Cameco shares recently rallied after stronger-than-expected third-quarter earnings, but are still flat for the year. They fetch just 15.2 times what the company has earned, well below its decade median of 24 times, and the low-cost producer generated net profit margins near 22% even when uranium prices slumped. Improving prices can only energize the stock.‘
Among the ‘reasons for optimism‘, Barron’s included ‘gradual progress toward the cleanup in Japan‘.
Barron’s piece inspired me to write to you today. As a long-term investor, I am not tempted – at all – by the apparent bargain in uranium stocks.
I want to preface what follows by saying I get the bullish case for uranium and nuclear power…
Read the rest of this article at Money Morning
