Uranium has captured public and investor interest since the Fukushima incident, and more recently the spotlight turns to potential uranium mining around the Grand Canyon and the permitting of the Husab uranium venture in Namibia.
“The outlook for nuclear power is still one of growth, albeit that the rate of growth might be slower than the world was expecting before the events at Fukushima,” BMO Capital Markets Analyst Edward Sterck said. “Current producers will continue to produce uranium as continued growth in nuclear power suggests that uranium demand will still grow, just at a slightly slower rate.”
Sterck says currently uranium valuations are reasonable and may represent opportunities for a longer-term investor with a higher tolerance for risk. He points to Cameco Corp. (CCJ) and Paladin Energy Ltd. (PDN.TO) as attractive for those investors.
“Bearing in mind the fact I’m cautious on the space, I think the recommendation towards current production is probably valid for two stocks in particular: Cameco (CCJ), which is the blue-chip stock of the space; and Paladin Energy (PDN.TO), which also has current production and is relatively well financed with a pretty robust balance sheet,” Sterck said.
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