Uranium Bull – Nuclear Energy Profits
We were in a jeep kicking up dust and dirt slowly crawling our way
towards the mountain ridge. It was late in the afternoon, and we were both tired. Jim turned to me and said, “You know, there is a bigger
problem in this industry. Nobody is talking about it but it’s gonna bite
them in the back-side.”
My ears perked up, as Jim was an old timer with a wealth of knowledge
and experience. He had been around the world working in the mining
industry, and today I was lucky enough to have him show me some old mining claims up in the hills of Utah.
His eyes sparkled, and his 70+ year old nature gave way to a little kid
struggling to keep a secret. “After they quit mining uranium in this
area, all of those geologists and engineers moved on. Now anyone who
has any experience is dead or ready to retire.”
He was right.
At the peak of the uranium mining boom in the early 1970s, more than
20,000 people were employed as engineers and geologists. Today the
number is closer to 400. In case you haven’t noticed, uranium prices are up more than 500% in the last few years. This commodity boom is driving uranium and nuclear-related stocks higher. In my mind, many of them still have a long way to go.Worldwide, there are about 440 nuclear reactors generating electricity
today. That number is about to grow significantly in the next few
years. The industry reports some 30 new nuclear reactors under construction and a good deal more under development.
The US, France and Japan lead the world in the use of nuclear power
for generation of electricity. It should come as no surprise that India
and China both have plans to expand their own power networks. Each
nuclear power plant being built today costs somewhere between $1.5 and $2.5 billion dollars.
This is no small industry and people are making lots of money– but some companies will benefit more than others.
General Electric, for example, is a major supplier of components and systems for nuclear power plants. GE Energy’s division sells large scale equipment like N Series steam turbines which are made specifically for nuclear reactors. They also sell both new and used parts, plant monitoring and performance software, and nuclear instrumentation including monitors.
Using GE’s products and services you could practically build a nuclear
power plant from the ground up!
Sounds great, but GE is not going to benefit much from this growing industry. They are too large of a company and this is just too small of a division for them to have an impact on earnings. Despite having 50 years of experience, there will be other companies that benefit more from this boom in nuclear energy than GE.
In my opinion, the big money will be made by companies exclusively
focused on providing processing and services for the nuclear energy
industry. This is an area that just doesn’t get as much attention from the mainstream investment media.
As such, I have spent the last few months researching the industry, speaking to experts, visiting mine sites, and doing due diligence (basically using my investment banking contacts to get on the “inside”). As a result, I have uncovered 4 relatively obscure companies that are set to soar in this rapidly growing industry.
We’re just putting the final touches on this report that will be available free to Dynamic Wealth Report subscribers sometime in December. You’ll be the first to get it, so stay tuned…
Category: Commodities
