Uranium’s recent rally following a flurry of positive sector news should result in further upward price momentum, says Eight Capital analyst David Talbot, who believes investors are presented with an excellent entry point for the sector.
Kazakhstan, the world’s largest uranium miner, said yesterday it would support prices at current levels and is ready to cut production again if the market falls any further.
Talbot says investors should focus on companies with high value, quality deposits, high-priced contracts, lowest quartile costs and strong balance sheets; his favorites include Cameco (CCJ +4.1%), Denison Mines (DNN +1.6%), Energy Fuels (UUUU +1%), Fission Uranium (OTCQX:FCUUF +0.8%), Nexgen Energy (NXE +3.6%), UEX Corp. (OTCPK:UEXCF +12.8%), Uranium Energy (UEC -3.6%) and Ur-Energy (URG -0.9%).
Uranium futures have gained 2.2% since reaching a YTD low on April 18, and Global X Uranium ETF (URA +2.1%) has surged 24% since hitting its YTD low on March 28.
Source: Bloomberg First Word