Warm Up Your Portfolio with Uranium

Monday, February 22, 2021

My heart goes out to anyone stuck in the miserable, shivering mess of winter weather that is shrouding half of America right now.

I’m especially sympathetic to the 3.8 million people who are without power in Texas alone. It has been very cold in the South, and the storm that went through the Midwest and Northeast was worse than anticipated.

Here in Florida, we don’t usually feel the bad weather. But most of us are expats from northern climates, and we can remember how hard those winters can be.

That said, don’t you think Texas would be handling these power outages a bit better if they had more nuclear power plants? I sure do.

In fact, I think nuclear power is an important part of the America’s transition to a greener-energy future.

And I know I’m not alone. Interest in nuclear power and uranium stocks is heating up.

Heck, all the rare earths, copper, nickel, battery metals and such are on the rise while previous leaders in the metals sector, gold and silver, cool their heels.

It sure seems like Wall Street is finally coming around to the potential in energy metals. And uranium is an important part of that.

I spent a good chunk of last year laying out the bullish case for uranium in articles for my Wealth Wave subscribers. I won’t rehash my arguments here, as you can read more than one example of my previous articles.

The bull case for uranium is strong. It has been delayed for all sorts of reasons. Obstacles might now be finally clearing up, opening the door to higher prices.

The latest reasons to be bullish on uranium …

1. COVID-19 Pressured Supply. Mines were not immune to the pandemic. As a result, mine closures resulted in 30% of global uranium supply temporarily dropping off. They’ll come back online, sure. But it just highlights the fact that more uranium mines will close in coming years due to resource depletion.

2. Much Demand Is “Uncovered.” Uncovered demand is uranium that utilities will need but haven’t contracted for yet. According to a recent report from Canaccord Genuity Group Inc. (TSX: CT.FO), uncovered uranium demand is estimated at 1.5 billion pounds through 2035. It’s likely that utilities will be forced to act this year to cover term contracts starting in 2023, considering that it usually takes two to three years to lock in those contracts.

3. Demand Is Rising. New nuclear power plants are being built around the world, especially in Asia. As a result, industry experts expect demand to rise 46% to 250 million pounds per year by 2035. The nuclear power industry is one in which buyers must make long-term plans, so that timeline is a lot tighter than it looks.

I have recommended individual stocks to my Gold & Silver Trader subscribers recently. Those names are only for my subscribers, though. If you’d like to join them, give our customer care team a call at 877-934-7778 — or 1-561-627-3300 if you’re outside the U.S. — Monday through Friday, 8:30 a.m. ­– 5:30 p.m. Eastern.

In the meantime, I can tell you an easy way to play this market: Global X Uranium ETF (NYSE: URA).

It has a total expense ratio of 0.69%, and it holds important names like the Uranium Participation Corp. (OTC Pink: URPTF), a fund that holds physical uranium; Cameco Corp. (NYSE: CCJ), a big Canadian uranium miner; ITOCHU Corp. (ITOCY), which is in the nuclear fuel business; and NexGen Energy, Inc. (NYSE: NXE), a uranium explorer.

A fund like URA won’t have the potential upside of individual stocks. But it also has less potential downside than uranium penny stocks. So, it’s a good choice for casual investors who want some uranium exposure.

Still, be sure to do your own due diligence before you buy anything. After all, knowing when to buy is just as important as knowing what to buy.

The last uranium bull market was over a decade ago. But like most metals, it’s cyclical. And uranium prices should heat up going forward.

You should come along for what could be a rocket ride.

All the best,

Sean

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