Cameco has announced that it will not raise its CDN$4.50/share bid for Hathor and will allow its offer to lapse tomorrow. Rio topped Cameco’s offer last week, putting in a bid of CDN$4.70/share, valuing Hathor at CDN$654 million.

Today’s share price rise in the other junior miners is no doubt based on the belief that Cameco still wants to acquire additional uranium assets now that it has lost Hathor. Denison, for example, has a market cap of just over $500 million and may be a reasonable substitute if Cameco decides to continue shopping around.

The acquisition of Hathor comes at nearly the same time that Kazakhstan has taken over as the world’s leading uranium producer. The Central Asian country now produces about 33% of the world’s uranium, more than the second and third largest producers (Australia and Canada) combined. The country also plans to build new enrichment facilities in a partnership with France’s Areva SA (OTC: ARVCY) in an effort to move up the value chain.

Cameco is already producing uranium in a joint venture in Kazakhstan and is seeking a production increase of about 33%, which would raise its share of production from project to 2.9 million pounds of uranium. That might be enough to forestall future acquisition plans.

Today, though, Cameco shares are up 6%, at $17.66 and Rio shares are up nearly as much, at $49.10. Shares of Denison are up more than 6.5%, at $1.30, in a 52-week range of $0.81-$4.52. Shares of Uranerz are up 12.75%, at $1.73, in a 52-week range of $0.87-$5.93 and shares of Uranium Resources are up 6.3%, at $0.85, in a 52-week range of $0.52-$3.98.

Paul Ausick

As is typical in a bidding war, competitor companies are also garnering some interest from the back-and-forth between Rio and Cameco as investors figure that the value of all uranium miners might rise. Uranium miners Denison Mines Corp. (AMEX: DNN), Uranerz Energy Corp. (AMEX: URZ), and Uranium Resources Inc. (NASDAQ: URRE) have all gotten a boost from the bidding, but perhaps not as much as might be expected.

Cameco originally offered C$3.75/share in cash for Hathor only to see Rio come in a few weeks later with an all-cash offer of C$4.15/share. Cameco raised its offer to C$.4.50 earlier this week, and now Rio has come back with an offer of C$4.59.

Denison, Uranerz, and Uranium Resources all saw share prices fall from the time of Cameco’s original offer on September 1st, bottoming out in early October. The shares got a bit of a boost when Rio’s offer was announced in mid-October, but shares of all three are still trading down from their levels of September 1st.

Uranium prices hit a peak of more than $70/pound in February, and have since fallen to around $55/pound. The disaster at Japan’s Fukushima Daiichi nuclear plant following the earthquake and tsunami in March and the subsequent decision by Germany to retire all its nuclear power plants has weighed on both nuclear plant builders and uranium miners.

Cameco, the world’s largest uranium miner, has experienced a near -50% drop in its share price since early March, largely as fallout from the immediate closure of 14 nuclear generation plants in Japan and Germany. Mining costs are also rising, putting even more pressure on profits.

The outlook for uranium demand is not very strong either. While it’s true that there are many new plants under construction, delays due to more regulatory reviews are being anticipated, even in China and India where construction has been growing.

The other impact of the current low price for uranium is that it stalls new mining projects. If demand picks up over the next several years, supply is likely to be weak due to cancellation of new projects.

That’s largely the reason that Hathor is worth the fight. The company is sitting on reserves that are estimated to be able to produce up to 5 million pounds of uranium annually. And regardless of a possible slowdown in production, uranium miners expect China’s nuclear building program to proceed as planned. Chinese demand is expected to grow, as is India’s, and Hathor’s uranium is already being produced and there’s plenty more to dig out.

There’s no doubt that Rio has deeper pockets than Cameco, and Rio’s latest offer totals about C$654 million. But Cameco has about $1.2 billion in cash and short-term investments in its war chest, so the battle may not be over quite yet.

Paul Ausick

The impact on uranium mining companies large and small could be dramatic if more countries follow Germany’s lead and reject nuclear generation completely. Even China has adopted a more ‘slow-go’ approach to nuclear generation. Mining companies include Cameco Corp. (NYSE: CCJ), Denison Mines Corp. (AMEX: DNN), Uranium Resources, Inc. (NASDAQ: URRE), Uranerz Energy Corp. (AMEX: URZ), Uranium Energy Corp. (AMEX: UEC), UR-Energy, Inc. and (AMEX: URG). USEC Inc. (NYSE: USU) processes uranium into a low-enriched form, and General Electric Co. (NYSE: GE) and Shaw Group, Inc. (NYSE: SHAW) are leading builders and servicers of nuclear power plants. France’s Areva (OTC: ARVCY), and Japan’s Toshiba Corp. (OTC: TOSBF) are also among the world’s leading builders of nuclear power plants but are excluded because comparable information for the companies is not available.

One interesting sideshow that could impact all the uranium miners is the current bidding war between Cameco and Rio Tinto plc (NYSE: RIO) for Canadian junior mining company Hathor Exploration Ltd. Hathor is expected to take the Rio Tinto offer, leaving Cameco to shop for other uranium assets, most likely among the small miners we’re looked at here.

All data from Yahoo! Finance and MarketWatch, and current price quotes were gathered just before noon today.

Cameco Corp. (NYSE: CCJ) has a median target price of $31.10 from 8 brokers. Shares are trading today at $20.34, for an implied gain of $10.76, or 53%. Cameco’s forward P/E is 14.97 and the company pays a dividend yield of 1.8%. The stock’s 52-week trading range is $16.68-$44.81, and at today’s price that’s about 22% above its 52-week low and 55% below the 52-week high. Cameco is the world’s largest uranium miner, and falling uranium prices have hit the company hard since prices hit a peak in January of around $72/pound. Uranium now sells for about $52/pound, a drop of -28%, and that drop has been exacerbated by lower demand. Falling demand and price have had even harsher impacts on the smaller uranium miners. At this time, Cameco does not expect the rest of the world to follow the Japanese and German governments’ restrictions on nuclear energy.

Denison Mines Corp. (AMEX: DNN) has a median target price of $2.21 from 7 brokers. Shares are trading today at $1.49, for an implied gain of $0.72, or 48%. Denison’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.81-$4.52, and at today’s price that’s about 84% above its 52-week low and 67% below the 52-week high. Denison sold just 167,000 pounds of uranium in the third quarter, compared with 706,000 pounds in the same period a year ago. That cost the company nearly $3 million in revenues, and total revenues were less than half those of a year ago.

Uranium Resources, Inc. (NASDAQ: URRE) has a median target price of $5.00 from a single broker. Shares are trading today at $1.10, for an implied gain of $3.90, or 355%. Uranium Resources’ forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.52-$3.98, and at today’s price that’s about 112% above its 52-week low and 72% below the 52-week high. The company reports earnings on Monday, but even the single broker with a target price can’t be bothered to offer estimated results for the company. The implied gains here are strictly fantasy.

Uranerz Energy Corp. (AMEX: URZ) has a median target price of $5.49 from 3 brokers. Shares are trading today at $2.04, for an implied gain of $3.45, or 169%. Uranerz’s forward P/E is 12.22 and the company does not pay a dividend. The stock’s 52-week trading range is $1.17-$5.93, and at today’s price that’s about 74% above its 52-week low and 66% below the 52-week high. Uranerz, like Uranium Resources, sports a stupendously high implied gain because it is so weak. These two might be prime candidates for the loser in the bidding war over Hathor.

Uranium Energy Corp. (AMEX: UEC) has a median target price of $4.98 from 6 brokers. Shares are trading today at $3.14, for an implied gain of $1.84, or 59%. Uranium Energy’s forward P/E is 2.78 and the company does not pay a dividend. The stock’s 52-week trading range is $2.20-$7.48, and at today’s price that’s about 43% above its 52-week low and 58% below the 52-week high. Uranium Energy just committed to pay about $85,000 in cash and about $940,000 in restricted stock at today’s price for a uranium mining project in Arizona. That sent the share price down slightly, which is probably less than should have happened.

UR-Energy, Inc. and (AMEX: URG) has a median target price of $2.37 from a single broker. Shares are trading today at $1.10, for an implied gain of $1.27, or 115%. UR-Energy’s forward P/E is negative and the company does not pay a dividend. The stock’s 52-week trading range is $0.75-$3.37, and at today’s price that’s about 47% above its 52-week low and 67% below the 52-week high. UR-Energy does not yet produce anything, as its Wyoming mine is still in development. The company has spent a total of about $116 million since 2004, and is looking to begin production in the second quarter of 2013. It’s anyone’s guess what the price of uranium will be then.

USEC Inc. (NYSE: USU) has a median target price of $3.38 from 2 brokers. Shares are trading today at $1.91, for an implied gain of $1.47, or 77%. USEC’s forward P/E is 10.11 and the company does not pay a dividend. The stock’s 52-week trading range is $1.17-$6.35, and at today’s price that’s about 63% above its 52-week low and 70% below the 52-week high. USEC mailed notices to its 450 centrifuge workers in late October informing them that the company may begin laying off workers in the first two weeks of November. When it released third-quarter earnings last week, the company posted a smaller-than-expected EPS loss, but missed revenues by a mile.

General Electric Co. (NYSE: GE) has a median target price of $20.00 from 14 brokers. Shares are trading today at $16.32, for an implied gain of $3.68, or 23%. GE’s forward P/E is 10.39 and the company pays a dividend yield of 3.7%. The stock’s 52-week trading range is $14.02-$21.65, and at today’s price that’s about 16% above its 52-week low and 25% below the 52-week high. GE doesn’t specify exactly what part of its revenues come from nuclear plants, but it maintains partnerships with Japan’s Hitachi and Toshiba for building and servicing nuclear plants around the world.

Shaw Group, Inc. (NYSE: SHAW) has a median target price of $27.00 from 13 brokers. Shares are trading today at $24.21, for an implied gain of $2.79, or 12%. Shaw’s forward P/E is 9.46 and the company does not pay a dividend. The stock’s 52-week trading range is $18.98-$41.62, and at today’s price that’s about 28% above its 52-week low and 42% below the 52-week high. Known primarily as a heavy construction company, Shaw owns a piece of Toshiba’s nuclear operations in both the US and the UK, as well as a 20% stake in Toshiba’s Westinghouse nuclear operations. The company is building  four nuclear units in the US and holds a services contract on four more new plants in China. For the fiscal year ended in October, Shaw’s nuclear work helped cover revenue shortfalls in coal plants.

Paul Ausick

Every US company involved in the nuclear fuel business is getting beaten up this morning. Uranium Resources, Inc. (NASDAQ: URRE) is down nearly -12% and Uranium Energy Corp. (AMEX: UEC) is down -4%. Ur-Energy Inc. (AMEX: URG) is off nearly -11% and Uranerz Energy Corp. (AMEX: URZ) is off nearly -5%. The disaster at Japan’s Fukushima Daiichi power plant following the March earthquake and tsunami has essentially killed investor enthusiasm for uranium stocks.

In USEC’s case, the federal government had delayed approval for a conditional loan guarantee for $2 billion to complete construction of its centrifuge project in Ohio. The US Department of Energy is seeking additional information before reaching a decision. USEC has told investors that unless the loan guarantee shows some signs of moving toward approval, the company may have to ultimately discontinue its operations. And a possible shutdown could happen within weeks, not months.

The federal government and the Obama administration re-iterated support for nuclear power shortly after the Japanese disaster, but both remain cautious about making any high visibility moves too soon. Especially moves that indicate on-going support for nuclear power development.

That’s why all the uranium stocks are getting a beating today. Investors have no reason to believe that federal support will be forthcoming for the nuclear industry in the US, and, like so many non-hydrocarbon-based energy projects, lack of federal government support equals the kiss of death.

The other uranium stocks are all miners, but if there is no support for new nuclear development, then the value of these stocks will drop as well. Aside from early comments supporting nuclear power, the US has been non-committal, whereas Germany and Italy have both indicated that no new nuclear plants will be built and, in Germany, existing plants will be closed over the next decade or so.

Just before noon USEC shares are trading down nearly -15%, at $2.04, having set a new low for the 52-week range of $2.03-$6.35. Uranium Resources shares are off -14%, at $1.11, within a 52-week range of $0.50-$3.98, while Uranium Energy shares have come back slightly to $2.94, off -2%, in a 52-week range of $2.40-$7.48. Ur-Energy shares are down -12%, at $1.32, in a 52-week range of $0.80-$3.37, and Uranerz shares are down nearly -7.5%, to $2.41, in a 52-week range of $1.10-$5.93.

The Global X Uranium ETF (NYSE: URA) holds assets in all these stocks and is off nearly -6% today, at $10.57, a new 52-week low with 52-week high of $22.42.

Paul Ausick

Following the disaster at Japan’s Fukushima Daiichi nuclear power plant, Germany shut down seven of its oldest nuclear power plants until they could be inspected. Now those plants, and the other 10 in Germany’s nuclear fleet will all shut down by 2022.

The impact on uranium stocks has been immediate and ugly. Uranium Energy Corp. (AMEX: UEC) shares are down nearly -6% this morning, to $3.11, within a 52-week range of $2.11-$7.48. Ur Energy Inc. (AMEX: URG) shares are off nearly -8%, to $1.66, in a 52-week range of $0.73-$3.37. Uranerz Energy Corp. (AMEX: URZ) shares are off -8.5%, to $3.12, in a 52-week range of $0.87-$5.93. Uranium Resources, Inc. (NASDAQ: URRE) is down more than -4%, to $1.86, in a 52-week range of $1.82-$3.98.

Other companies that could feel some pressure from Germany’s decision include General Electric Co. (NYSE: GE), Toshiba/Westinghouse, and France’s Areva SA (OTC: ARVCY).

Germany’s decision follows a similar decision last week by Switzerland’s government. It’s hard to determine what part of the decision is driven by political concerns, but Germany’s ruling political coalition has come under heavy attack for its pro-nuclear stance and recently has suffered some electoral defeats that have been attributed at least partly to the coalition’s tolerance for nuclear power.

Germany’s nuclear 17 plants generate about 23% of the country’s electricity, whereas Swiss nukes produce about 40% of that country’s electricity. The Germans plan to cut electricity consumption by 10% by 2020 and to double the share of renewable generation to 35% in the same period. Germany’s nuclear operators include RWE AG, E.ON AG, EnBW Energie B-W, and Sweden’s Vattenfall. None is likely to accept the new policy without a fight.

The Obama administration has reiterated its commitment to nuclear development and Japan has said that it would increase its investment in renewables, but would continue to rely on nukes for the immediate future.

News of Germany’s decision lit a fire under most solar PV stocks today, as expectations for more demand from Germany have surfaced. Solar PV maker JA Solar Holdings, Co., Ltd. (NASDAQ: JASO) shares are up almost 6.5%, to $6.03, in a 52-week range of $4.22-$10.24.  First Solar Inc. (NASDAQ: FSLR) shares are up about 2%, to $123.53, in a 52-week range of $100.19-$175.45. LDK Solar Co., Ltd. (NYSE: LDK) shares are up more than 7%, to $7.53, in a 52-week range of $4.97-$15.10. Suntech Power Holdings Col., Ltd. (NYSE: STP) shares are up more than 5%, to $8.47, in a 52-week range of $7.05-$11.41. Yingli Green Energy HOlding Co. Ltd. (NYSE: YGE) shares are up almost 6%, to $9.26, in a 52-week range of $8.20-$14.29. Trina Solar Ltd. (NYSE: TSL) shares are up nearly 4%, to $22.85, in a 52-week range of $15.09-$31.89. The Guggenheim Solar ETF (NYSE: TAN) is up more than 5%, to $7.45, in a 52-week range of $6.02-$9.34.

The boost to solar stocks follows a report last week from IMS Research predicting that European solar PV installations will “fall considerably in the next 3-5 years.”  The research was completed before either Switzerland or Germany announced their exit from nuclear generation. And IMS does not take at face value any government’s promises for increases in solar PV installations.

In Germany, the decision to eliminate nuclear generation should lead to an increase in solar PV installations by the country that once led the world in new solar capacity. But will the country re-adjust its feed-in tariffs upward again to attract investment? Or will it decide that with the elimination of nuclear power, new solar capacity will have to stand on its own regarding pricing? Or will the nukes be replaced by coal- or gas-fired generation?

Germany can probably afford to boost its incentives for solar PV back to near previous levels. It may be, though, that the government chooses to let solar PV generation stand on its own, calculating that lower consumption and falling panel prices will help even out prices. The country could also more rigidly apply carbon emissions limits and boost carbon pricing, making coal or gas more expensive.

From a policy perspective, Germany’s decision to give up nuclear power could be a real game changer. If the country can cost-effectively replace its nuclear generation with renewables, it might be that anything’s possible.

Paul Ausick

While it’s still too early to draw any firm conclusion, uranium miners are getting hit by fears that demand for uranium will fall. Coal miners and crude oil and natural gas producers could see a jump in demand, especially in the short term as Japan deals with restoring electricity without relying on the 33% it generates from nuclear sources.

Uranium miners like BHP Billiton plc (NYSE: BHP), Rio Tinto plc (NYSE: RIO) and its majority-owned company Energy Resources of Australia, Cameco Corp. (NYSE: CCJ), and Denison Mines Corp. (NYSE: DNN) are taking the brunt of the market’s punishment so far today.

US miners with the word ‘uranium’ in their name are also getting a beating. Uranium Energy Corp. (AMEX: UEC), USEC Inc. (NYSE: USU), Uranium Resources Inc. (NASDAQ: URRE), UR-Energy Inc. (AMEX: URG), Uranerz Energy Corp. (AMEX: URZ), and the Global X Uranium ETF (NYSE: URA) are all down more than -15% in early trading.

Nuclear plant builders like General Electric Co. (NYSE: GE) and Shaw Group Inc. (NYSE: SHAW) are also feeling the squeeze.

Energy companies like Exxon Mobil Corp. (NYSE: XOM), Chevron Corp. (NYSE: CVX), and Royal Dutch Shell plc (NYSE: RDS-A) with substantial operations in Middle Eastern and Australian liquefied natural gas (LNG) projects are expected to see a rise in prices for natural gas as Japan imports more LNG to use for generating electricity.

Coal miners like BHP and Peabody Energy Co. (NYSE: BTU), again operating out of Australia, are expected to see increases in demand for thermal coal. Demand for metallurgical coal, used in steel-making, is also expected to increase once the extent of the damage in Japan is known and the country starts to rebuild.

Demand for crude in Japan could also rise if the country replaces some of its power generation capacity with oil. Crude prices have been falling slightly, probably due to the closing of several of Japan’s refineries. This is a temporary situation that should be resolved in a few weeks, after which crude prices could rise depending on the extent of extra demand from Japan.

Japanese demand for substitute fuels will be slow to start with, and then pick up as the country recovers. Prices for crude oil and natural gas will rise as this happens, but ordinarily the rise would be short-lived. How quickly, if ever, Japan restores its damaged nuclear plants is more a political matter than anything else.

That’s also the case in other countries that have nuclear programs in the works or in the planning stages. The uncertainty about the future of these programs will depress uranium stocks, particularly those companies, like Cameco and some of the smaller US uranium miners, that rely heavily on uranium for revenue.

Calls for a halt to nuclear power development will intensify over the next weeks and months, but they are unlikely to be heeded. More likely is that safety procedures will be reviewed and strengthened, and new projects will be more closely monitored while older ones might be more strictly reviewed when license renewals are being considered. But nuclear power generation is not going to disappear, and it would be a safe bet to say that over the longer term, nuclear generation will increase.

Paul Ausick

A variety of other uranium and nuclear-based companies have really outperformed USEC over the past 12 months. Uranium Resources, Inc. (NASDAQ: URRE), Ur Energy Inc. (NYSE: URG), Uranerz Energy Corp. (NYSE: URZ), and Uranium Energy Corp. (NYSE: UEC) have all posted share price gains of more than 50% in 2010. Uranium Resources’ shares gained about 300% in the past 12 months.

USEC is counting heavily on a $2 billion loan guarantee from the US Department of Energy for construction of its American Centrifuge Plant. Without the loan guarantee, USEC “will not continue spending on the project.” The company tentatively plans to spend $50 million in the first quarter of 2011.

The company’s fragmentary guidance for 2011 is pushing the share price down this morning. USEC said it expects 2011 revenue of $1.7 billion, well below previous analysts’ expectations of $2.01 billion. USEC expects a decline of 10% in sales and a “significant” decline in revenue related to decommissioning the gaseous diffusion enrichment plant at Portsmouth, Ohio.

USEC also did not offer guidance for earnings or cash flow from operations. The company did say, however, that “we expect to report a net loss for the year.” USEC expects gross profit in 2011 of $70-$80 million, and SG&A expenses of about $60 million. Add to that the anticipated expenditure of $50 million in the first quarter for the centrifuge plant, and the red ink really starts to flow.

It could be that USEC is just in the wrong part of the uranium/nuclear industry. Canadian miner Cameco Corp. (NYSE: CCJ) even posted a larger share price gain in the last 12 months than did USEC. Reactor builders like France’s Areva or GE Hitachi Nuclear Energy, a joint venture between Hitachi, Ltd. (NYSE: HIT) and General Electric Co. (NYSE: GE), are having far better luck cashing in on the new interest in nuclear power generation plants.

The Global X Uranium ETF (NYSE: URA) has also performed better in its short life than USEC, though 4.05% of URA’s holdings are USEC stock. URA’s largest holding is Cameco, which represents 17.57% of the ETF’s holdings, and its top four holdings, accounting for more than 50% of the ETF’s total assets, are miners. Digging uranium out of the ground or building nuclear generation plants is where the value is, not in enriching uranium fuel.

USEC’s shares are trading down nearly -7% at around noon today, at $5.23, within the stock’s 52-week range of $3.90-$6.50. Volume is about three times the daily average.

Paul Ausick

Market Vectors Nuclear Energy ETF (NYSE: NLR) is the ETF that tracks the nuclear energy field. However, it is very global and tracks the DAXglobal Nuclear Energy Index.  It normally invests at least 80% of total assets in equities of U.S. and foreign companies which derive at least 50% of their total revenues from nuclear energy business.  This ETF is down 3.5% at $22.64 and its 52-week trading range is $13.75 to $31.06.

Uranerz Energy Corp. (NYSE/AMEX: URZ) is the speculative exploration stage company for uranium resources.  Shares are down 4.4% at $1.93 in light volume trading of 63,000 shares (avg. volume is 350,000 or so).  Uranerz has a 52-week trading range of $0.40 to $2.67.  Denison Mines Corp. (NYSE/AMEX: DNN) made an investment Uranerz Energy Corp and its stock is down 4% at $1.73 on 380,000 shares, and its 52-week range is $0.54 to $6.95.

Uranium Resources, Inc. (NASDAQ: URRE) is another micro-cap company that engages in the acquisition, exploration, development, and production of uranium.  Its shares are down 6% at $1.05 on about 600,000 shares (vs. 1.15 million avg. volume).  Its 52-week range is $0.36 to $3.69.

Perma-Fix Environmental Services Inc. (NASDAQ: PESI) is a remediation company under a DOE contract for nuclear clean-up.  Its shares are down 2.6% at $2.60 on almost 200,000 shares (vs. almost 300,000 avg. volume).  Perma-Fix has a 52-week trading range of $0.63 to $2.74.

Think of the good news.  If you are investing based upon the notion that the U.S. is going to have to keep being dependent upon foreign energy, this denial just helped to keep that scenario as more likely rather than less likely.

JON C. OGG
JULY 28, 2009

Each unit is comprised of one common share and one-half of one common share purchase warrant for a period of 24 months at an exercise price of US$3.50 per share.  The securities have not been and will not be registered.  These fall under Reg. D inside the U.S. and fall under Reg. S outside the US in offshore accounts.

Denison is also a uranium producer in the United States.  Net proceeds will be used for the following:

• to advance the 100% owned Nichols Ranch and Hank ISR properties whose license and permits were submitted in Q4-2007;
• complete an aggressive exploration drill program on the 81% owned Arkose Property, contiguous with Nichols Ranch and Hank;
• and for general working capital purposes.

Denison is a uranium producer with mining assets in the Athabasca Basin region of Saskatchewan, Canada and also in Colorado, Utah and Arizona. Denison also has a strong development portfolio with advanced stage projects in Zambia and Mongolia.

In US terms, Denison has a $1.6 Billion market cap and looks like it is profitable. Uranerz Energy has a $94 million market cap in U terms and is still in its early stages.

Jon C. Ogg
March 18, 2008

Let’s assume for a moment that we forget about the discussions leading to delays that have been perpetual.  Let’s for get about the political side of nuclear power.  Lets forget about killing land under mountains where we’ll bury the stuff in Nevada.  And let’s forget about the potential environmental catastrophe that can result if something goes horribly wrong.

There are many stock plays in the U.S. alone that will be huge beneficiaries of this if even one nuclear power plant approval goes through.  If there is one, why not the full dozen of them.  Here is the lot of companies:

Shaw Group (NYSE:SGR) is perhaps the most vertical of the engineering and construction firms.  Fluor (NYSE:FLR) is also in there.  And we can’t leave out the monster General Electric (NYSE:GE) for new reactors, nuclear fuel, reactor services and performance services.

Cameco (NYSE:CCJ) out of Canada is THE go-to behemoth in the stock market for Uranium miners and producers.  The much smaller company in the US is USEC (NYSE:USU), although its shares were hit exceptionally hard Friday after testing started.  Some more smaller and much more speculative stocks in the sector are Uranium Resources, Inc. (NASDAQ:URRE), U.S. Energy Corp. (NASDAQ:USEG), Uranerz Energy Corp (AMEX:URZ), and even Canyon Resources Corporation (AMEX:CAU).  Mosaic (NYSE:MOS) and CF Industries (NYSE:CF) are stealth plays in the sector that can enrich uranium from phosphate, but you should know that prices have to be very high and have to be expected to remain very high for quite some time for those to be cost effective.

The Economist recent magazine cover also flaunted a comeback for nuclear power.It said America’s nuclear industry is about to embark on its biggestexpansion in more than a generation. This will influence energy policyin the rest of the world.  CNET today discussed the wave of coming applications for more nuclear power plantsthat are coming. Personally, I’m a believer in this.  No greenhousegases, no pollution, no icky air around the place.  But the dark sideis not Three Mile Island.  That was nothing.  The dark side isChernobyl and a vast area of land that won’t be habitable forgenerations and generations.  The other thing that might act as apossible lid on investors reviewing nuclear power stocks this timearound is that local gas prices for your car are far lower than earlier this year when energy prices were rising but not as high as the $80.00 seen this week.

No wonder Merrill Lynch got creditfor what seemed to be overly bullish analysis that ended up lookinglike they had a crystal ball for a few months.  They gave a huge safetynet for uranium prices. The Canadian National Post also gave some buyout picks in the sector based on Raymond James analysis.

Nuclear power plants are coming online more and more in China andIndia, and Japan and France are largely dependent upon the glowinggreen juice to power those nations.  Russia is showing it is expandingnuclear power use again and South Korea is expanding its program.  Noneof us in the Western hemisphere are going to be too excited about this,but the chances that we are going to have to deal with a nuclear-usingIran is getting larger instead of smaller.

Back in August an ETF was launched as the Market Vectors Nuclear EnergyETF that launched on the American Stock Exchange under the "NLR" ticker, but only a portion of these stocks in here are US-based and many names wont be familiar.  Here is the full list of the company stocks in the ETF.

Jon C. Ogg
September 14, 2007

Jon C. Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and does not own securities in the companies he covers.