Cameco (CCO)

A brief uranium note before we start this blog: a couple of weeks ago, I pondered whether uranium was oversold enough for a big rally. Since then, we've seen some positive signs. First, Uranium Participation (U) the tracking stock for the price of uranium climbed to a 3-week high. And Cameco (CCO) the world's largest uranium producer looks to be carving a bottom and has held its ground in the $12 area for about 2 weeks. As well, Nexgen (NXE) shares have made an impressive U-turn in the past few days. But we don't have an all-clear signal just yet. That's because the uranium sector needs Cameco to take the sector lead (and cross above its 200-day average) ahead of any uranium sector rally, so it's a stock worth watching closely. Finally, junior producer Uranium Energy Corp (UEC*US) which I wrote about in that blog, received confirmation this week that they will be added to the Russell 3000 Index later this month (as well as either the Russell 2000 or Russell 1000).

Perhaps it was no surprise with a pivotal US Federal Reserve interest rate decision pending, but hard assets were taken down 'hard' last week. Copper, gold, silver, platinum and oil crumpled heavily, and reached oversold conditions not seen in months, even years. However, experience suggests whenever multiple commodities hit the ground hard in unison, it is really an opportunity cloaked in panic. When I studied my own forecasts and saw they lined up well with this panic bottom idea, I began to focus on some resource stocks with star power.

This week, we look back at past stock ideas from my November blog on what was a hated, unpopular and out of favour sector, uranium.

With speculation returning to the stock market and spurring on high-flying moves in sectors like gold, silver, lithium, and marijuana-related stocks over the past year, we look for where we might next see some outsized gains from beaten down assets. Lo and behold from the ashes we are starting to see uranium stocks, a painfully bruised and out of favour asset class, looking more and more attractive.

It’s no exaggeration to say Saskatchewan-based Power Prospector Tim Gitzel is powered by fuel and food. His corporate involvement spans both nuclear giant Cameco (CCO) and NYSE-listed fertilizer play The Mosaic Company (MOS*US), and lately he’s been adding to his stake in both companies.

In this blog we're going to look back at a few stock ideas we've presented over recent months - and give our view on how they look going forward.

We should first start by saying that the view we shared in late summer was that the US market (a great influence on our Canadian markets) would rise during fall of last year. In reality, the US market and many world markets, after making a sharp correction in August, have rebounded and moved sideways for months. The inability of markets to make headway, along with the great amount of volatility, have fed into investor fear and dampened sentiment, creating conditions that may very well allow markets to surprise to the upside.