This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

These Mining Stocks Could Go Higher

But uranium looks like it has much more room to run over the long haul as demand will keep rising. In a recent report, Morgan Stanley's analysts noted that 147 new nuclear power plants will be built over the next decade. That figure rises to 330 if you account for all of the proposed but yet-to-be-approved plants. China leads the way with 159 proposed plants, while India (60), Russia (44) and the United States (31) account for the bulk of the remaining planned sites.

As the rising role of nuclear power starts to become more evident, industry players will have increasing confidence in the strong long-term demand for uranium. And that could push uranium toward the $65 to $70 mark in a few years -- that's a 25% to 35% spike from current levels. Moreover, share prices of key players could rise at an even faster clip, thanks to high operating leverage at uranium mines.

Safe vs. Speculative

Investors can look to protect their downside while seeking reasonable upside by investing in the industry's blue-chip player Cameco (CCJ - Get Report).

Shares have already risen 30% since then, but they could be hit by profit-taking if uranium prices cool. But longer-term, you're likely looking at 50% upside from here if uranium surges toward the $70 mark.

Another relatively safe play for investors is Uranium Participation, which holds uranium in inventory and thus its shares closely track the underlying commodity. (Note: This is a Canadian company that trades on the Toronto Stock Exchange. Buying and selling stocks in this exchange is relatively easy for most individual investors, but call your broker for more information if you're interested.)

Action to Take: Uranium ran to $136 a pound in 2007. That was based on pure fevered speculation, and most industry players quickly realized that such prices were unsupported by any underlying fundamentals. Still, a rebound to just half that peak would be great news for the stocks in this sector. And with the nuclear renaissance taking shape in coming years, we may get there sooner than many think.

As noted earlier, Uranium Resources, Uranerz Energy and UR Energy are all highly leveraged to uranium prices, moving three to five times faster than the underlying commodity's price. But I'm averse to chasing speculative names after a strong run, and would suggest closely watching the names for a hoped-for pullback. Other stocks that have potentially significant upside include Paladin Energy (PALAF.PK), which trades on the Pink sheets, and Bannerman Resources.

This article originally appeared on StreetAuthority. To read more articles from David Sterman on StreetAuthority, you can visit this link.

Disclosure: At the time of publication, David Sterman owned no positions in the stocks mentioned.

This article originally appeared on StreetAuthority, founded in 2001 by industry veterans Lou Betancourt and Paul Tracy. StreetAuthority is a financial research and publishing company with offices in Austin, Texas and Gaithersburg, Maryland. The company aims to help individual investors earn above-average profits by providing a source of independent and unbiased investing ideas.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
CCJ $15.45 1.18%
URZ $1.14 -1.72%
URG $0.88 -0.01%
URRE $1.81 1.30%
AAPL $128.46 -1.50%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs