Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Uranium stocks are about to go nuclear and you read it here first at Palisade Research!
For five and a half years, uranium stocks have been mired in a historic bear market, ignited by the Fukushima disaster. That was until November of 2016 when uranium stocks quietly began creeping their way up.
Since that time, uranium producers, Cameco (CCJ) and Energy Fuels (UUUU), have seen increases of 33% and 21%, respectively. Meanwhile, explorers Uranium Resources (URRE) and NexGen Energy (TSX:NXE) have seen similar gains of 32% and 42%! The Global X Uranium ETF (URA), which is comprised of 23 companies, has also seen a meaningful increase, posting gains of 10%.
Potentially of more significance is the fact that Uranium Participation Corp. (TSX:U), a company that invests in physical uranium, is up, despite the fact that uranium is down! Historically when Uranium Participation trades at a discount to spot price, it indicates bearish sentiment in the market. However, when it trades at a premium, it is used to indicate an imminent rise in the price of uranium.
After Fukushima, both Uranium Participation and the spot price of uranium dropped off significantly, and for the next several years the performance of Uranium Participation clearly lagged the performance of the spot price. However, there has now been a change in paradigm, with Uranium Participation diverging and outperforming uranium prices. That divergence began on November 22, 2016.
This means that institutions and savvy investors are becoming more bullish. We believe that investors will likely look back at November, 2016 as the start of it all.
For these reasons outlined above, Palisade Research will be the first group to publicly call the bottom in uranium stocks. Get ready for some exciting times because when uranium stocks move, they soar!
Next week, Palisade Global Investments (www.palisadeglobal.com) will be making a special announcement regarding its involvement in the uranium space. Stay tuned.
