A few days after the Three Mile Island Accident I was talking to the highest producing female retail broker in the U.S.
This was back when Denver, Salt Lake City, Vancouver and Alberta all traded penny uranium issues.
Speculations that cost two or three dollars a week before were "deer nuts" [under a buck -ed] and I asked what she thought. She said "Kid, this is serious and when stocks get broken like this you'd better buy quality and you'd better be patient".
There are some major differences in the energy markets between then and now but her words came back to me yesterday. We are cautious, there's no reason to run to the parimutual window with cash in each hand, the goal is to run from the window.
The Australian issues were down double digit percentages while those traded in London are finding few bids. In U.S. premarket action Canadian giant Cameco is down another 13% on top of yesterday's 12.3% decline.
Here's a quick round-up:
From the Sydney Morning Herald:
CMC Markets sales trader Ben Taylor said speculation that a nuclear cloud was floating towards Tokyo city had terrorised the markets.Barron's may have been early with this story that came out after the U.S. close Monday
...‘‘Further rumours of another flash crash coming has seen value thrown out the window as panic selling sets in across world equity markets,’’ Mr Taylor said.
Investors sold out of Australian uranium stocks in droves as the trading session ground on amid a greatly weakened outlook for the sector.
Shares in Rio Tinto-majority owned Energy Resources of Australia (ERA), the world’s fourth largest uranium producer, plunged to a more than six-year low after dropping 12 per cent on Monday. ERA was down $1.18, or 14.3 per cent, at $7.07, its lowest since January 2005.
Africa-focused uranium miner Paladin Energy also continued to slide after slumping more than 16 per cent on Monday.Paladin was down 69 cents, or 17.5 per cent, at $3.26, its lowest since mid-March last year.
Among junior uranium explorers, Peninsular Energy was down 30.6 per cent at 5.9 cents, Energy and Minerals Australia backtracked 26.3 per cent to 14 cents, Extract Resources shed 18.45 per cent to $8.00, Toro Energy dropped 19 per cent to 8.1 cents and Energia Minerals was 15 per cent weaker at 17 cents.
Even other forms of energy such as coal and conventional hydrocarbons were not spared.
Oil and gas giant Woodside clawed back some earlier losses to close down 1.5 per cent at $41.58, while coal miner Macarthur Coal finished down 2.7 per cent at $10.36.
Rio Tinto’s Coal and Allied recovered well after reaching a low of $111.04 to finish at $114, down 80 cents, or 0.7 per cent....MORE
Barron's Take: Taking Stock of Uranium Stocks
With uranium shares getting shellacked amid fears of a nuclear meltdown in Japan, Cameco looks tempting.
The world is still reeling from Friday's deadly earthquake and tsunami in Japan. In addition to the terrible toll it has taken on human life, aftershocks are seriously threatening some of the nation's nuclear power plants, pushing shares of uranium-related names lower today.
The disaster has shuttered 11 of the nation's 53 operating nuclear reactors. News of an explosion at the No. 3 reactor at the Fukushima Daiichi nuclear complex on Monday morning local time, the same location that sustained a blast on Saturday, was followed by reports that a third reactor (No. 2) at the location saw its cooling systems fail. A full meltdown could release dangerously high amounts of radiation. However, officials stressed that no radiation leakage that would indicate a meltdown had occurred, and that the containment vessels surrounding the reactors were not damaged by the blasts.
Worries that safety concerns propelled by Japan's problems would hamper future nuclear efforts sent shares of uranium stocks plummeting. Cameco (ticker: CCJ), the world's largest uranium miner, was an obvious target of the selloff, losing 14.5% to $31.96 in midday trading. Smaller miners took even larger hits. Uranium Resources (URRE) plunged 27% to $1.70 and Denison Mines (DNN) was down 24% to $2.49.
At this point, it's impossible to say how much damage Japan's nuclear fleet will ultimately sustain from the earthquake, or what future safety measures will be adopted to compensate for some of the issues that have arisen.
However, it is unlikely that any longer-term consequences will be severe enough to warrant the size of today's selloff in uranium miners. It's not surprising that the names have come under intense pressure, but we think patient investors will likely be rewarded by buying on the dip...MORE