This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

Uranium Miners Dig Up Solid Returns

Stocks in this article: NLRURA

Editor's note: This piece originally ran earlier today on our newest Premium service, ETF Profits . Click here for a 14-day trial to this exciting product!

Nuclear energy ETFs recently jumped back into the spotlight with impressive gains. Chuck LeBeau wrote about nuclear ETFs last month, and covered the two comprehensive funds in the sector: PowerShares Global Nuclear Energy (PKN) and iShares S&P Global Nuclear Energy Index (NUCL). In addition to these, there are two other ETF options that offer significant exposure to the nuclear energy industry.

The Market Vectors Uranium & Nuclear Energy ETF (NLR) and the Global X Uranium ETF (URA) are both strong plays. NLR gained over 30% in the past six months and URA is up over 20% since it launched in November 2010. Those returns have far surpassed the returns of PKN and NUCL -- not surprising when you consider that PKN and NUCL are dominated by low-beta utility plays. In contrast, NLR and URA focus on miners, which have benefitted greatly from the recent surge in uranium prices from the mid $40s to roughly $70 per pound.

The story of uranium's rise is simple. First and foremost, commodities have been rallying since last summer, when the Federal Reserve first suggested that another round of quantitative easing (QE) could be in the pipeline. Though many investors focused on gold and oil, uranium actually outperformed both with gains of more than 55%.

Meantime, global warming issues and politics have spurred governments to invest billions of dollars into the nuclear sector to find "cleaner" energy sources. This has led to increased speculation that demand for the metal will soar in the future. According to the World Nuclear Association (WNA), more than 60 nuclear reactors are under construction in 15 different countries, with over 150 more on the way.

Having launched in August 2007, NLR was the first nuclear energy ETF to hit the market. NLR tracks the DAXglobal Nuclear Energy Index and holds 24 companies that are involved in various aspects of the nuclear power industry. About 40% of NLR is weighting towards uranium miners. NLR's top holding is Canada-based Cameco (CCJ), which makes up 8% of the fund. A behemoth in the nuclear energy industry, Cameco is one of the world's largest uranium miners. NLR is very liquid and, with over $290 million in assets under management, it is the largest nuclear energy ETF in the market. That said, URA is quickly catching up.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 16,974.31 -31.44 -0.18%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,549.2260 -15.0680 -0.33%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

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