Four Uranium Investments Enhanced by Economic Indicators

Paul Dykewicz

Four uranium investments offer appeal amid economic indicators that show key climate-conscious provisions of the Inflation Reduction Act championed by the Biden administration failing to live up to the name of the new law one year after it was signed in August 2022.

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President Biden has been trumpeting his economic policies to spark flagging support about his leadership amid sagging popularity in political polls, but recent reports about inflation, mortgage rates and prices are showing little relief for budget-strapped consumers. I side-stepped partisan politics when commenting recently on EWTN News Nightly, preferring instead to focus on economic data not backing President Biden’s boasts about the benefits of the Inflation Reduction Act.

EWTN News Anchor Tracy Sabol interviews Paul Dykewicz about the economy.

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President Biden signed the Inflation Reduction Act into law but prices still keep climbing for housing, food and many other expenses that fall especially heavily upon those of modest means. One indicator of the legislation’s true intent may have been signaled about a year ago on August 16, 2022, when the White House announced the new law reflected one of the “most significant” acts Congress has taken on clean energy and climate change in U.S. history.

Four Uranium Investments Are Powering Ahead

The White House released a statement on that date, claiming President Biden redefined American leadership to confront an “existential threat” to the climate and set forth a new era of innovation and ingenuity to cut consumer costs and spur the global clean energy economy. However, the latest Consumer Price Index (CPI) clearly shows prices rising unrelentingly.

In July, the Consumer Price Index for All Urban Consumers increased 0.2%, seasonally adjusted, while rising 3.2% over the last 12 months, when not seasonally adjusted. The index for all items — less food and energy — increased 0.2% in July when seasonally adjusted, up 4.7% for the past year when not seasonally adjusted. The CPI measures average change over time for the prices paid by urban consumers for a market basket of consumer goods and services, according to the U.S. Bureau of Labor Statistics.

The Fed’s tight money policy is having its effect,” wrote Mark Skousen, Ph.D., in his latest Forecast & Strategies investment newsletter hotline. “Interest rates are rising sharply, with the yield on the benchmark 10-year Treasury topping 4.25%, the highest it has been in 15 years. And the 30-year mortgage rate is now over 7%.”

Recent reports found recent rates for 30-year mortgages topping 8%.

Mark Skousen, head of Forecasts Strategies and scion of Ben Franklin, talks to Paul Dykewicz.

Four Uranium Investments Feature Uranium Energy Corp.

Uranium Energy Corp. (NYSEAMERICAN: UEC), an Austin, Texas-based pure-play uranium company, seeks to advance the next generation of low-cost, environmentally friendly In-Situ Recovery (ISR) mining uranium projects. The company has two production-ready ISR hub-and-spoke platforms in South Texas and Wyoming, anchored by licensed and operational processing plant capacity.

UEC also has seven U.S. ISR uranium projects, all with their major permits in place. The company further has other diversified holdings of uranium assets, including one of the largest physical uranium portfolios of U.S. warehoused U3O8, a major equity stake in the only royalty company in the sector, Uranium Royalty Corp., and a pipeline of resource-stage uranium projects in Arizona, Colorado, New Mexico and Paraguay.

Skousen first brought Uranium Energy Corp. to my attention through his TNT Trader advisory service. He recommended the stock and related call options in TNT Trader on June 28. In just two months, the stock soared more than 25%. The related call options have jumped 133.33%.

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Chart courtesy of www.stockcharts.com.

Cameco Started the Profitable Trading in TNT Trader for Uranium Investments

It is the second straight successful trade of a uranium stock that Skousen has made in TNT Trader in recent months. Subscribers to the TNT Trader service were able to scoop up a quick gain of 8.85% in Canada’s Cameco Corporation (NYSE: CCJ) between the recommendation on May 5 and the closing of the position on June 14. The stock paid a small dividend of $0.089 last Nov. 29, but it also offers opportunity for capital appreciation as a clean energy play.

Related Cameco call options that Skousen recommended in TNT Trader produced profits, too. He recommended selling half on June 13 for an 84.66% gain, while the other half stopped out on June 15 for a 47.91% return. The average of 65.91% for both trades is a hefty return for a short-term trade.

Chart courtesy of www.stockcharts.com.

Four Uranium Investments Include URA

“We don’t want Treasury yields to collapse, as that’d signal a hard economic landing,” said Jim Woods, leader of the Intelligence Report investment newsletter. But a drift lower, especially in the 10-year Treasury Note, would help support the market multiple and make the argument for a 20X valuation (up from the current 19X) more viable.”

Investors will pay attention to Fed Chairman Powell’s comments about future interest rates, especially during speaking engagements such as last week’s Jackson Hole Economic Policy Symposium, Aug. 24-26.

A good way right now for investors to pursue profits is through nuclear power equities, Skousen said. Nuclear fission is nearly 8,000 times more efficient at producing energy than traditional fossil fuels or even solar, water and wind power, he added.

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The construction of average U.S. nuclear power plants required 40 metric tons of steel and 190 cubic meters of concrete per average megawatt of electricity generating capacity, Skousen commented. Compare that to a typical wind-energy system, which requires construction inputs of 460 metric tons of steel and 870 cubic meters of concrete, he added.

Woods Likes a Fund Among the Four Uranium Investments

“The Russian conflict is going to bolster the case for continuing nuclear energy output at current levels with existing facilities,” said Jim Woods, who heads the Successful Investing and Intelligence Report investment newsletters, as well as premium trading services such as High Velocity Options.

“There is also a good chance that several nations take additional steps to enhance their energy security using this established method,” Woods continued. “Those factors enhance the appeal of global stocks engaged in the discovery and production of nuclear components.”

Woods’ preferred vehicle to participate in this sector is the Global X Uranium ETF (NYSEARCA: URA). The goal of this diversified ETF is to provide investors access to a range of companies engaged in uranium mining and the production of nuclear components, including those in extraction, refining, exploration or manufacturing of equipment for the uranium and nuclear industries, he added.


Chart courtesy of www.stockcharts.com.

Plus, the stock paid a small dividend of $0.049 on December 29, 2022. Dividend payments never are guaranteed but it would not surprise me if another payout was provided by the company late this year, too.

Paul Dykewicz interviews Jim Woods, who heads Intelligence Report.

Four Uranium Investments Climb as Clean Energy Gains Appeal

The White House guidebook for the Inflation Reduction Act provides a detailed overview of the clean energy and climate mitigation, agriculture, and conservation-related investment programs. It further identifies eligibility to apply for funding. A quick glance at the guidebook shows an emphasis on government funding of projects, not ways to curb inflation, stem price increases and stop runaway mortgage rates.

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Bob Carlson, a pension fund chairman who also heads the Retirement Watch investment newsletter, said he prefers to invest in uranium through iShares MSCI Global Metals and Mining Producers (PICK). Carlson mentioned the exchange-traded fund (ETF) to me last fall and it has advanced since then by double-digit percentages.

“I was attracted to this ETF even before the invasion of Ukraine,” Carlson told me. “The mining companies had gone through a long bear market. They worked to reduce debt and otherwise clean up their balance sheets. Their more efficient operations mean most of them can profit at relatively low prices for their commodities and will earn strong profits as prices rise.”

Retirement Watch leader Bob Carlson meets with Paul Dykewicz.

Michelle Connell, who heads Dallas-based Portia Capital Management, commented that she prefers to invest in PICK rather than individual uranium companies. One reason is most of the stocks held in PICK are profitable, while having positive revenue growth and book value. PICK also has shown superior long-term performance versus gold and silver ETFs by outperforming the precious metals on a total return basis for one year, three years and five years, Connell said.

Chart courtesy of www.stockcharts.com.

“Maybe this is a better way to hedge for inflation than a gold ETF,” Connell said.

One point of caution is that PICK is market-cap-weighted, with its top 10 stock holdings comprising more than 50% of the ETF’s portfolio, so underperformance by one of those key positions could crimp the fund’s returns, Connell continued.

Freeport-McMorran (NYSE: FCX), of Phoenix, Arizona, ranks near the top of the ETF’s biggest positions. The company owns copper mines worldwide. Copper is in short supply and is used in many manufacturing processes, including green technology and electric vehicles, Connell continued.

Michelle Connell heads Dallas-based Portia Capital Management,

Former Republican presidential candidate and media mogul Steve Forbes, who I interviewed last month at the FreedomFest conference in Las Vegas, recently said the “green energy” projects funded by President Biden are “expensive” and “not good for the environment.” Especially for those who are skeptical of his views, you can click this video link to hear his reasoning.

Four Uranium Investments Rise Along with Mortgage Rates

Mortgage rates in the United States are at a level not seen in over 20 years, a stark difference from a couple of years ago when families were refinancing to lock in low rates, according to a recent note from BofA Global Research. In the United States, refinancing rose to $2.6 trillion in 2020-2021 when the Fed lowered interest rates to zero. The number of U.S. homeowners without a mortgage today is near 40% and among those who aren’t so lucky, 85% are on a fixed-rate mortgage.

“For these households, the debt burden remains unchanged during a hiking cycle, only impacting those with either a floating rate mortgage or a home purchased after rates went up,” BofA wrote. “This makes the Fed’s policy tool somewhat of a blunt instrument, potentially requiring higher rates and/or holding rates higher for longer. However, the other side of the coin of a less powerful monetary policy is that consumer spending seems resilient on the back of strong employment and a tight housing market.”

Forbes accused the Biden administration of spending hundreds of billions of dollars on “schemes” to replace fossil fuels with renewable energy sources. For instance, Forbes said one wind turbine requires the use of 2,500 tons of concrete that goes 30 feet deep into the ground.

“Imagine trying to reclaim that land,” Forbes said.

Four Uranium Investments Ascend as Wind Power Wanes

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The wind turbine also requires 900 tons of steel and 45 tons of unrecyclable plastic, Forbes continued. To operate the wind turbine, it requires 700 gallons of costly synthetic lubricants that are vulnerable to spills since they must be replaced each year, he added.

Wind turbines are shown in the waters between Denmark and Sweden. Photo by Paul Dykewicz

Solar and wind farms need “gargantuan” amounts of land, Forbes said. For example, New York City occupies 205,000 acres of land, but it would require 2,000,000 acres of land to fuel the Big Apple solely with renewable energy, he explained.

A 100-megawatt gas-fired turbine is about the size of a residential house and would provide electricity for 75,000 homes, Forbes counseled. To give equivalent energy to the same number of homes, 20 wind turbines would occupy 10 square miles of land.

“Renewables are very expensive,” Forbes continued. “Cost overruns here are as common as they are at the Pentagon.”

I spotted wind farms in northern Poland helping to supplement other sources of energy. Photo by Paul Dykewicz

Poland is one of the countries putting wind farms to use in wide open spaces. Photo by Paul Dykewicz

Wind farms are “notorious bird killers,” degrade existing transmission lines and displace wildlife, Forbes warned. Plus, what should be done with the 1,000-pound batteries in electric vehicles that require replacement with no recycling of the worn-out ones? he asked rhetorically.

A large flock of birds are shown near wind turbines that are known to be hazardous to their health. Photo by Paul Dykewicz

Four Uranium Investments Stand Out Among Renewable Sources of Energy

Renewables also require an immense amount of mining for minerals. To replace fossil fuels, a 40-fold increase would be required in lithium, Forbes said.

These matters warrant substantive discussion and analysis, Forbes advised. Without it, the result will be bad environmental results and record-breaking waste of federal money, he added.

The data show that there is far more to fighting inflation than coming up with a name to slap on a new federal law. High inflation, rising mortgage rates and increasing prices indicate that Biden’s policies need revamping to deliver what he has been promising but not providing. Factor in the rising political risk due to Russia’s unrelenting war in Ukraine, a formidable counteroffensive by the nation under attack that once mined 4.5 million tons of quality iron ore annually in pre-war days and the apparent assassination of Wagner mercenary leader Yevgeny Prigozhin in a plane crash may give investors a chance to charge up their returns with uranium.

Paul Dykewiczwww.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street JournalInvestor’s Business DailyUSA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. Call 202-677-4457 if you want Paul to sign and provide special personalized dedications.