Monday, March 20, 2006

Uranium Mining Stocks and their Resource Ties

Uranium stocks held up.

Uranium stocks held up!

The stock market, particularly the energy-heavy TSE, retreated from its highs. Crude oil tumbled a few dollars and the energy sector of the TSE fell 2.1%, worst out of the 10 industry groups. Gold was not exempt either, and gold stocks ended the day with more red than green.

However,

Uranium stocks held up!

Yes, not all uranium mining stocks were in the green, but I see on my lists more green than red. International Uranium Corporation and Uranium Participation Corporation were down (think it's because they have such long names?!) but Urasia and SXR Uranium One ended the day higher. The star would be Paladin, which gained nearly 5% after ending the day in the Aussie ASX even higher.

Now, I rarely will ever comment on the day-to-day price movements of uranium companies because I am a long-term investor myself. However, today hopefully is the start of something significant: the disassociation of uranium stocks from their energy-oil, really-cousins.

It would seem illogical for uranium stocks to move with the price of crude oil, but the unfortunate effect of only having a minority "in the know" about uranium fundamentals has uranium being lumped together with oil and gold stocks. Perhaps today was a sign that the investing public in large has finally realized that uranium supply and demand is quite different from any other resource sector.

Or maybe today was just an anomaly. Watch for more interesting dichotomies in the future.
 

4 Comments:

Anonymous Anonymous said...

According to CBC News World- Business News with Fred Langdon last night, March 20, Jim Dines told his subscribers to cut their holdings in Uranium stocks.

5:24 AM  
Anonymous Anonymous said...

Previous post at 5:24 am should have read, "Reduce" vs cut. Sorry.

5:26 AM  
Blogger Spelunca said...

I am not a subscriber to the Dines letter so I cannot comment on that. However, I am slightly worried about the current uranium run, especially amongst the small juniors. i probably will be addressing this in a future post

7:17 PM  
Anonymous Anonymous said...

Dines said "...would not object to selling half of Cameco.."

10:46 AM  

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