Uranium Shares On Sale After Week Of Mixed News (MEE, BP, UEC, PALAF, URRE, CCJ, USU)
After the Massey Energy Company (MEE) coal mining disaster earlier this year and the BP (BP) Deepwater Horizon rig explosion in the Gulf of Mexico, the importance of domestic alternative energy sources has taken center stage. The uranium sector is painted in red this week after a mixed basket of stock-specific news failed to spur any individual rallies. Despite looming supply issues weighing on spot prices, the recent alternative energy push could draw some attention to these stocks in the second-half of 2010. Given the sector’s volatility, it may not be suitable for all investors, but it is certainly worth watching.
As a whole, the Uranium Stocks Index has matched the S&P 500 in performance over the last month, but only Uranium Energy (UEC) and Paladin Resources (PALAF) are in positive territory for the period.
Earlier this week, Uranium Energy announced ongoing success at its Palangana project in South Texas, but the report couldn’t help shares emerge from their recent slump. The stock is down by -3.5% over the past five sessions.
Elsewhere in the sector, penny stock Uranium Resources (URRE) got crushed this week when the company priced its 23.8 million-share common stock offering at 42 cents per share. The company had announced last Friday that it would offer up to 25 million shares, and according to the Associated Press, underwriters have a 30-day option to buy another 3.3 million shares. Just last week Uranium Resources shares soared higher by as much as 50% after a favorable court ruling, but shares have since plummeted to well under pricing prior to the announcement.
Cameco (CCJ) announced a supply agreement with China Nuclear Energy Industry Corporation to supply 23 million pounds of uranium concentrate through 2020 after Thursday’s close. The stock got an early pop this morning, but has since pared gains to trade higher only fractionally. Cameco has lost -6% over the past five sessions.
USEC (USU) broke into positive weekly territory briefly this morning, but the stock has since fallen back into the red. Back in May USEC shot higher after announcing a deal with Toshiba and Babcock & Wilcox Investment Company, but shares are well off their highs from earlier this month.
Investors can track the Uranium Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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