Monday, October 16, 2006

Oct 16 Uranium Stocks Update: Uranium Participation Corporation (TSE:U)

Add John Zechner, chairman, J. Zechner Associates and Peter Brieger, chairman and chief investment officer, GlobeInvest Capital Management to the list of uranium bulls. Both were on hour-long RoBTV segments today and both gave a positive outlook on uranium.

Zechner stated: uranium's got its own story..clearly supply tightness there..buyers much less sensitive to price (versus oil)..in uranium there's not much else you can get running a nuclear reactor right now..as long as these things are growing and demand is there..plus not the biggest cost input in running a reactor..can see uranium @ $80-100

Analysis: Uranium Participation Corporation was one of Zechner's top picks today and, as such, predicates his bullish views on the spot price of uranium oxide has UPC is really the ETF or proxy of U3O8, although its stock chart is nowhere as pristine as yellowcake prices have been in its upward ascent.

Brieger followed with: we've owned UPC since the initial issue..between now until May we will exercise warrants..like long-term outlook for uranium..one of the great solutions to American energy crisis..have to take 3-5 year view..in order of priority..a) continue to hold UPC..b) exercise warrants if you can take 3-5 year view..there are a ton of people exploring for uranium..and at some point if some of the explorations prove successful, you can have an excess of supply..make take is if you take on all the proposed construction of nuclear facilities..there is a genuine shortfall..I don't know where supply is coming from

Analysis: Brieger's latter comments were in response to host Michael Hainsworth's probing as to why Paul van Eeden had such bearish sentiments against uranium investing. Brieger and Zechner do not immediately make me think uranium, not nearly as much as people like Dines and Taylor for example. To me they are part of the uranium bandwagon, believing in the supply and demand fundamentals of uranium without wanting to delve too deeply into analyzing and parsing through hundreds of uranium juniors. Nevertheless, this represents another victory for uranium supporters in the battle to draw investors into the uranium field and furthering uranium away from the likes of base metals.
 

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