USEC Explodes Amid Energy Sell-Off (USU, URRE, UEC, URZ, GE, DNN, PESI, ES)

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URANIUM COVERAGE

Uranium producers, mining the metal for nuclear and other applications

• Headline Risk Continues To Weigh On Uranium Stocks (CCJ, USU, DNN, CXZ, URG, URRE)
• Uranium Stocks Jump As China Nears Announcement On Nuclear Safety Plan (CCJ, URG, URRE, UEC, URZ, PALAF, USU)
• Uranium Sector Slammed On German Plans To Halt Nuclear Power Use (CCJ, URG, URZ, CXZ, UEC, PALAF, URRE)

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Avg. Market Cap:	$1.1B
Avg. P/E Ratio:	30.4
Avg. Div Yield:	0.2%

It’s been a wild ride for USEC (USU) investors over the last year, but those who bought in at the bottom of the stock’s latest post-earnings sell-off are winning big today after Toshiba and Babcock & Wilcox Investment Company signed a definitive agreement to make a $200 million investment in the nuclear play. The investment will come in three installments, each of which will be subject to its own preconditions, according to the press release. USEC president and CEO said, “This agreement will strengthen USEC as a global energy leader that delivers nuclear fuel and related services on a reliable, competitive basis,” in a statement.

USEC shares are soaring by 18% on the news, but it hasn’t done much to perk up the Uranium Stocks Index, where other components are falling with the market.

Uranium Resources (URRE), Uranium Energy (UEC), and Uranerz Energy (URZ) are among laggards for the session, slipping by -6% or more. Just last week we noted the same three stocks among the sector’s biggest losers over the last month as energy segments take a dive and supply woes weigh on the uranium segment.

Coverage by the Financial Times notes that a number of global firms are getting involved in the nuclear supply chain, including domestic conglomerate General Electric (GE). Meanwhile, Reuters reports that Toshiba’s investment is a step towards its goal of becoming a full-service nuclear power business.

Among relative pure-plays in the Nuclear Stocks Index, none have managed to break into positive territory during the recent market slide. As a whole, the Index is off by -15% over the last month, led lower by uranium miner Denison Mines (DNN), clean-up firm Perma-Fix Environmental (PESI), and technology-based nuclear services firm EnergySolutions (ES).

It will be interesting to see if investors start dipping back into the nuclear segment amid a global push for alternative energy sources, and a revived interest by the Obama Administration after the president balked on his pledge to support USEC via DOE loan guarantee last summer. Investors can track the above Indexes for performance trends, Pro holdings data, and a suite of other metrics at tickerspy.com.

Tags: DNN, ES, GE, PESI, UEC, URRE, URZ, USU