What's up with the Uranium stock rally?

Question

Uranium Resources (Nasdaq:URRE) has a weak IPO at $2.50 last week and jumps 22% yesterday and another 10% this morning.

At the same time, an anemic Uranium Energy Corp (AMEX:UEC) leaps by more than 25%, and Uranerz Energy Corp (AMEX:URZ) takes a moderate climb.

This looks like speculation to me - none of the companies have sound fundamentals. None has positive EPS. The price of their main product -uranium fuel - is down.

Could this be the result of McCain's speeches on opening new nuclear plants?

Is this just another place to put funds?

What do you think?

Answer 1

I would definitely sell into a significant rally in the lower quality plays in the space. Why? The best players in the uranium space are still near their lows.

With that said I think uranium (the commodity ) is pretty close to bottoming out in price though irregardless of who gets elected.

Answer 2

I think your analysis is correct -- it's speculation based mostly on the sector's possible future, not as much on the details of these particular companies.  (Although McCain is not the only one who thinks we need to boost our nuclear energy industry.)  So I wouldn't touch 'em, but then I rarely do short-term gambling.

Answer 3

It's pure and dangerous speculation. No new reactors are coming up soon, who would need that stuff. A reactor takes 10 years to build and start up. By the way McCain doesn't know his backside from a hole in the ground