The uranium market has been on fire over the past year. The spot price has risen from $20 to $113 since 2004. And now, with uranium futures available to trade on the Nymex starting today, the speculators will join in, as well as the uranium producers who are looking to hedge. It's important to take a look at the stocks that might be affected, and how. On the April 13 broadcast of CNBC's "Mad Money," Jim Cramer said there are two plays that can take advantage of the fact that Wall Street had not yet priced in uranium's cost at over $100, and the expense of producing it at $50 per pound if you extract it from phosphate. Check them out at
Cramer's Stealthy Uranium Plays. Of the two, Cramer said he likes Mosaic Company ( MOS) better than CF Industries Holdings ( CF). "Mosaic is the largest producer of phosphate on earth," Cramer said. "Mosaic has got the phosphate, and phosphate has got the uranium." On the down side, Barron's on April 17 wrote about how supply disruptions and dwindling inventories have severely hurt companies like Exelon ( EXC), which have to purchase uranium. "Operators in regulated electricity markets probably will be allowed to recover the higher costs of uranium via higher rates for customers," Barron's wrote. "But nuclear operators in competitive markets, like Exelon, Entergy ( ETR), FPL Group ( FPL) and Dominion Resources ( D), will see higher fuel costs deplete profit margins." For more of Barron's insight, go to Stockpickr's Who Will Get Hurt by Higher Uranium Costs? blog. Scroll down the right to see the "Hate list," stocks that are negatively being affected.
For the full list of U.S.-listed uranium miners, Stockpickr member Irongate has set up the
Uranium Miners (U.S.-listed) holdings portfolio, with some commentary. He also gives links to some other uranium-related Web sites and resources. It's interesting to see which hedge funds own a variety of uranium companies and which other companies they might own to hedge their exposure to the space. For instance, hedge fund Pate Capital owns both Cardero Resource ( CDY) and Fronteer Development Group ( FRG). Not only is Fronteer a uranium company, but it also owns a 47% stake in gold company Aurora Energy Resources. From looking at Pate's portfolio, I can see they are making two big bets: gold and alternative energy. For instance, they own Sasol ( SSL), which helps extract energy from coal, and Maxwell Technologies ( MXWL), which makes energy storage and power delivery products. They also own streetTracks Gold Shares ( GLD), a gold-focused exchange-traded fund. If there are any uranium plays that you think are interesting and are missing from these lists, set up a portfolio on Stockpickr.com and let me know.