Things were looking up for the uranium sector after President Obama touted the forecast of nuclear energy in his State of the Union address back in January, but a look at the aggregate performance of the Uranium Stocks Index shows that components have underperformed the market significantly over the last three months.
According to reports by MarketWatch, the Obama administration has proposed to include up to $55 billion in nuclear loan guarantees in the 2011 federal budget, and the World Nuclear Association indicates that scores of new reactors are already planned or under construction in East and South Asia. However, despite the bullish demand outlook, MarketWatch notes that a supply glut has driven uranium spot prices from a 2007 peak of $136 per pound to current values of around $40.
Uranium Resources (URRE), Uranium Energy (UEC), and Uranerz Energy (URZ) are among laggards, slipping by -20% or more over the last three months. As a whole, the Uranium Stocks Index is trailing the S&P 500 by -7.5% on a one-month basis, and only one stock, Ur-Energy Inc. (URG), is in positive province for the period. Meanwhile, in the Nuclear Stocks Index, all ten mechanism are in the red over the last month, with clean-up players US Ecology Inc (ECOL) and Perma-Fix Environmental (PESI) among laggards.
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