When will uranium stocks become the flavor of the month again among natural resource investors? Right now, you can't hardly give away a good uranium stock like Crosshair or Dension. Meanwhile, pig in a poke coal stocks in Saskatchewan are flying high. Other current flavors, understandably, are potash for making fertilizer and of course oil and gas plays of every stripe.
It shouldn't take too long for uraniums to come back into vogue, considering that uranium will be the most important fuel of the 21rst century and that a relative handful of companies, some publicly traded, have seized large claims covering many of the world's best potential supply sources of this energy metal.
Here is a chart of a closed end fund that provides a convenient way of making an intermediate to long term investment in this arena - Uranium Focused Energy. Middlefield of Canada, a major fund operator that also has a fund for il sands stocks, came out with the uranium stock fund in December 2007. Uraniums had a nice run in late 06 early 07 and then fell apart. While Middlefield must have thought the worst was over for uraniums by December 2007, that was not the case.
investdb.theglobeandmail.com
The fund's net asset value started the year at c$7.45 and as of june 5 is it just $6.00, after getting as low as $5.24 on May 1. The fund itself is trading on the Toronto at a discount to that NAV.
Current price per share is c$5.60, for a discount of 6.7 percent off the net asset value. that is not an unsually large discount for a closed end fund, fairly normal.
In its Uranium Market Update of May 5, management provided a list of its top ten holdings.
Cameco 10%, Paladin Energy 9%, Areva of France 9% (try buying that one yourself!), Uranium Participation Corp. 8 %, Denison Mines 8%, UEX COrp. 5%, Major Drilling Group Intl. 5%, energy Resources of Australia 5%, Uranez energy 4%, First Uranium Corp. 4%.
middlefield.com
The share holdings are quality issues! it is just that the uranium mining industry is out of favor right now. Instead, the natural resource speculators this spring and summer are favoring coal, potash, oil and gas.
That creates an opportunity in my view. |
