Going Nuclear

Source:

...According to the Energy Information Administration, total dollars spent on uranium in 2006 was $1.2 billion. That figure won't be much different for 2007. Taking into account the dramatic price rise of uranium, it would be safe to project annual uranium sales will reach $4 billion to $7 billion over the next 5 to 10 years...

...One area of interest has been nuclear power. Nuclear offers the benefits of zero carbon emissions and is well suited for large-scale, base-load power generation. Indeed, nuclear waste is an issue, but with proper planning and policy, waste can be managed. For investors, the main concern is how best to capture the nuclear economic opportunity? I am fortunate to have a professional investing background and the opportunity to be currently employed in the nuclear power industry. Quite possibly, I have unique insight. That being said, nuclear power once dormant, now burgeoning, is widely misunderstood - leading investors to make to make choices based on misperceptions. I'll share some insight, hoping to add some alpha along the way.

... For the past 30 years, the industry has seen little to no growth. Newly planned projects and those underway will dramatically change the growth prospects for dozens of companies and promises to supply plenty of opportunities for investors. Unfortunately, investors enthused about these prospects have chosen uranium producers as the primary proxy for the nuclear sector.

Don't get me wrong, I am not a uranium mining basher. I am simply trying to shed some light on the dynamics of the industry. The nuclear fuel market by my estimation is a $16 billion annual market. According to the Energy Information Administration, total dollars spent on uranium in 2006 was $1.2 billion. That figure won't be much different for 2007. Taking into account the dramatic price rise of uranium, it would be safe to project annual uranium sales will reach $4 billion to $7 billion over the next 5 to 10 years.

Still, as you can see, uranium remains only a portion of the nuclear fuel market. Furthermore, a meaningful share of the uranium market is largely unavailable to investors...

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