Posted on 16 October 2011.
All is not yet lost with uranium penny stocks. Japan’s nuclear disaster obviously damaged the reputation of the nuclear power industry in the near term, but the fundamentals, which were driving uranium stocks forward remain intact. The world’s tidal wave of demand for electricity is not going away. Natural gas and nuclear power are really the only two viable candidates for filling that demand.
Nuclear power will live this accident down and resume its expansion. This makes uranium penny stocks an intriguing bet going forward. Prices are rock bottom, compared to what they were when future demand was being priced in to the stocks.
• Liberty Star Uranium and Metals (LBSR) has wisely diversified its prospects into other avenues of development. Most of its resources are currently going into a large copper mining project in Arizona. This allows it to make money on ordinary commodities, until such time as nuclear materials become profitable again.
• Uranerz (URZ) is a Wyoming company that has seen its stock price fall from 6.00 to 1.40, which puts it in the high end of penny stocks. Uranerz has apparently bottomed, and appears to be on the uptick.
• Hathor Exploration Ltd. (HAT) is a Canadian firm that holds significant leases in Canada’s Athabasca region, which is home to 23% of the world’s uranium production. It trades at a level that is high for what is technically a uranium penny stock, but Hathor has shown excellent stability in the face of adverse market news.
There are really only two viable strategies at this time. The first strategy is to buy something that has been severely oversold, and wait for it to rise in tandem with the nuclear power industry. Another possibility is to pick something diversified that will add nuclear luster to its performance later on. No investor should expect fast profits from uranium penny stocks at this time.
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