Obama’s Nod for Deputy Energy Sec. Positive for Nuclear Power

Could the President's nomination for Deputy Energy Secretary been far more supportive for the nuclear sector than one may initially think?

Jul 19, 2014 at 1:42PM

The nuclear sector stands a bit taller on the heels of President Obama nominating Elizabeth Sherwood-Randall, the National Security Council's top nuclear proliferation and defense policy official, to be deputy secretary of energy. For a nuclear sector that has been severely kicked to the curb post-Fukushima with spot uranium prices at $28.25 per pound, or 60% below levels seen in early 2011, investors in uranium may be relieved that Obama is replacing one nuclear expert in Daniel Poneman, who is stepping down after five years, with another prominent nuclear figure in Sherwood-Randall.  

Sherwood-Randall's chief task will be to oversee the nuclear complex, overhaul nuclear laboratories and explore ways to lower the country's nuclear weapons arsenal. So we have an Energy Secretary in Ernie Moniz who is committed to lowering carbon, and now there is an expected deputy secretary who is laser-focused on nuclear security. A nice one-two combination that could make uranium miners look attractive to investors 

Uranium miners may benefit
Considering Sherwood-Randall's expected role to balance our weapons stockpile and the country's nuclear materials, the uranium supply shortage in the U.S. and the greater need for technology to advance nuclear power may now finally get much more focused attention from the Department of Energy. That bodes well for uranium miners since nuclear power emits no carbon emissions and can operate 24/7, two very important items to remember in an increasingly sustainable society. 

Cameco (NYSE:CCJ) has publicly stated its desire to acquire assets that are more near term when it comes to production, so investors may want to keep an eye on Uranium Energy Corp. (NYSEMKT:UEC), which is producing uranium from its Palangana mine in South Texas. 

Those looking to play uranium through the ETF may also find the Global X Uranium ETF (NYSEMKT:URA) a good place to allocate capital for the longer term.

Real dependence
The fact the U.S. produces only 4 million domestic pounds of uranium per year while importing over 55 million pounds may need to be reexamined under a microscope by Sherwood-Randall, especially since our uranium imports far exceed our dependence on foreign oil, so this certainly falls under an issue of national security. Any renewed focus on the importance of nuclear power in the U.S. may finally put a bottom in on the spot price of uranium and help depressed valuations of miners in the sector. 

Sherwood-Randall revamping the nation's nuclear labs may end up being the big story here and a huge victory for R&D in the sector since innovation will likely play a much bigger role in the future of safe nuclear power. From the evolution of small modular reactors, using waste as a catalyst for fuel or even tapping thorium, a material that is fertile and cannot sustain nuclear fission itself, advances in modern technology are making the future world of nuclear power much different today with enormous focus on safety and non-proliferation. That seems to be why Sherwood-Randall got the nod from Obama. 

Therefore at a time when Moniz is committed to reducing carbon output in the U.S., the focus on nuclear safety seems like natural fit as nuclear energy seems strongly positioned to now play an even bigger role in our nation's energy mix. 

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John Licata does own shares of Energy Fuels while Blue Phoenix does consult for the company. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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