“The Nuclear Monopoly that Cannot Fail” Wealth Advisory

By Travis Johnson, Stock Gumshoe, August 19, 2008

OK, I’m just about out of time as I rush to begin the fabulous Gumshoe vacation, but I’ve got a quick new one to share with you before I get sand between my toes.

This one is from an ad for the Wealth Advisory, by Steve Christ, and it’s about uranium enrichment.

I can’t go into my whole spiel and do all the explainifyin’ for you at this moment, but I can at least identify the company.

Steve tells us that there’s a massive boost coming for this firm — they have a new facility ready for production by late next year, and they have a near monopoly on supplying fuel for US power plants, they supply more than 50% of the enriched uranium needed for electicity generation in the US, and almost a third of that needed in the entire world.

Most of that supply has come from dismantling old Soviet warheads (I wonder if they’re starting to regret that decision now over in Moscow?), but apparently there will be new supply coming on line next year to make up for that.

Here’s a little excerpt for you from Steve’s letter:

“The ‘End Product’ of our Domestic Nuclear Monopoly

“You see, when this single company begins to open up its new production facility in late 2009, it will hit the market at precisely the right moment.

“Moreover, the U.S. government has basically set up the company with a protected U.S. market… by restricting cheaper foreign imports, largely from Europe. That includes a restriction on imports from Russia into 2020.

“But make no mistake… While this company may be aided by the federal government, it’s certainly no start up. To the contrary, it has an established foothold… with its roots going back to the beginnings of the U.S. nuclear power industry.

“In fact, just last year this company supplied nearly 1/3 of the world’s enriched uranium supply, fueling 150 reactors on 3 continents. All this while meeting over 50% of the U.S. supply.

“But as I mentioned earlier, that feat was only possible using fuel from old Soviet warheads… and that program is rapidly coming to an end. Without the program, only 12% of our enriched uranium would come from domestic sources.

“That has this particular company working feverishly on a plan to replace those resources before they run out for good — one that will help the country rebuild its enrichment capacity before it’s lost to foreign competition.

“Now, understand this… The plant itself has been costly and subject to big cost overruns. And without explicit government backing, investors have been harder to find.

“But with a $2 billion government loan guarantee likely on the way — sooner rather than later — the news itself will catapult shares of this vital company much higher… as investors begin to pour in on the announcement.

“This One Could Be a Double as the News Crosses the Wire!

“And here’s the kicker…

“The stock price is cheap. In fact, it’s trading well below both its book value and its cash per share.

“(But don’t expect this key piece of the nuclear infrastructure to be on the bargain rack for long.)

“Fundamentally and technically, it’s forming an investment springboard that will send its share price on a long, long run.

“The key, then, is catching it at the right time.”

Steve obviously believes that now is the right time — I don’t know if it is or not, all I can tell you is that this company is …

USEC (USU)

This is an old uranium refining company, and it does indeed have close relations with the US government and it currently suppiles more than half of the demand for US nuclear power plants (thankfully for the Gumshoe, only one company can claim that).

So as I said, no time to research this one in detail, and I don’t know the company well. I’ll be enjoying what I hope will be a uranium-free beach, but feel free to opine on USEC or any of their competitors (like good ‘ol Silex Systems, which I wrote about over a year ago).

Happy Investing!


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15 Comments on "“The Nuclear Monopoly that Cannot Fail” Wealth Advisory"

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farley 5
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farley 5
August 19, 2008 3:29 pm

Not the right time.

http://stockcharts.com/def/servlet/SC.pnf?chart=USU,PLUADANRBO%5BPA%5D%5BD%5D%5BF1!3!.25!!2!20]&pref=G

Perhaps if this can break $7.25. No one cares about this one.

RJ&A Canada pegs uranium at $80 in 2010. Remember, uranium is found all over the world including sea water. If the Aussies change their mind and allow more mines, then the price could go to $50.

destry
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destry
August 19, 2008 11:35 pm

I owned this puppy at one time…Didn’t lose anything;
Didn’t gain much either…I’d have to check my journal notes…However,I don’t think they’ll ever go the distance..Even a hefty gov’t infusion for equipment upgrade didn’t matter.
Van Eck has a sector uranium ETF…Other than Cameco, I can’t think of a worthwhile pure uranium play.

Brian B.
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Brian B.
August 20, 2008 8:26 am

Well enjoy the vacation Gumshoe. USU’s chart starting a new bull trend, but has had over a twenty box move down in the last 18 months. Catalyst that could be good for USU is McCain in the white house. And Bal. sheet looks better in 2009 than 2008. I may ease some trades in at 3,4,5, and 6 and see what developes. Good Investing!

farley 5
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farley 5
August 20, 2008 9:13 am

Remember, Camco’s Cigar flooded for the second time. Something about the mine BEING UNDER A LAKE! Even money says they close the mine and start somewhere else.

david
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August 20, 2008 9:34 am

Purepointe has 6 sites that look appealing and is in a JV with Cameco on two deals with results coming out this fall. It is a Junior with promise but like Samuel once said “a miner is a liar standing next to a hold in the ground.”

farley 5
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farley 5
August 20, 2008 10:14 am

David – There was no, “Contact Us”, button on your site. Whisper your e-mail and I’ll send the mining report to you.

SageNot
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SageNot
August 20, 2008 11:09 am

Hmmmmm, the Oxford Club highlighted USU in Q4/2006 as a “can’t miss” investment due to the world running out of uranium, yeah right!

http://finance.yahoo.com/q/ta?s=USU&t=5y&l=on&z=m&q=l&p=m50,m200&a=&c=

Not long after touching $25./shr. USU began a death spiral involved in all types of bearish fundamentals, none of which were uranium shortages I might add. Add to that the 2007 halving of spot uranium (& it’s lower still presently) & you have one of the Oxford Club’s worst calls ever.

Unless McCain upsets Obama in Nov. I’d wait on any large investment in this stock unless the current TA breaks out.

sequential
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sequential
August 20, 2008 12:11 pm

hi
Have any of you tried Jeff Siegels Alternative Energy
Speculator seems like he has a very good track record
would like your feedback please
S

farley 5
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farley 5
August 20, 2008 1:11 pm

Sequential – This is a tough market. To avoid the single stock risk you may want to look at some ETF’s. I have NOT looked at technicals or the story so please DYODD & read the prospectus: PBW, PUW, PZD, GRN, GEX

KRL
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KRL
August 20, 2008 4:17 pm

Have watched USU for a very long while – I think their worst is behind them and bought a very small amount a couple Mondays ago. I would dearly like to by more but I’m having trouble getting *MY* money out of my 401k SDB and into my E*Trade IRA…

Merril Lynch stinks.

Tom L.
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Tom L.
August 20, 2008 5:46 pm

Around the time USU gets its new facility running, Silex – SILXF should have its new tech plant start up. I own Silex and some options on USU for after the election. Cameco just got all that yellowcake we seized in Iraq for free I think.

Omaha-Oracle
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August 21, 2008 12:03 am

I would suggest that we are about to see a humongus wave down. Most boats rise when the tide comes in, but as Warren down the street says, we will easly see who has been swimming without trunks in the months ahead. Buying anything now seems to be spitting in the wind.

Rod Leister
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Rod Leister
August 20, 2008 5:56 pm

Certainly sounds like USEC but have you looked at Silex? Laser enrichment of uranium and backed by GE.
Right off the radar in the US as it is an Australian company, not sure if it is on the pink sheets.
For me it is the one to watch, besides uranium their process can enrich silicon to the utmost purity which of course means much less heat is generated in the likes of computer chips.

Sam
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Sam
August 20, 2008 8:39 pm

You probably are right. Because if I remember correctly, GE is working with Silex. I do own SILXF. Regarding USU it is a good way to get options with small risky investment which I am planning on.

Makie
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Makie
August 21, 2008 3:53 pm

I have been following Purepoint for over a year now and I think patience is the key to owning the stock. It looks very promising.

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