Uranium Stocks Fail to Keep Pace

John Robertson


The Global X uranium ETF price has remained in a downtrend for four years. It has produced a 3.4% return since the end of 2015 (against a 27% return in the Euromoney global mining index and a 25% return in the ASX small resources share price index). This relatively weak performance has come despite the uranium market outlook being stronger than the outlook for other raw material markets because of the already confirmed longer term growth in nuclear power generation capacity. ASX listed uranium exposed equities such as Bannerman Resources, Toro Energy, Peninsula Energy and Deep Yellow have produced returns between -29% and +11% so far in 2016. Within this timeframe, however, uranium exposed equity prices have reconnected with the broader energy complex. Since the turn in oil prices on 11 February, the Global X uranium ETF has added 24%. That still leaves the Australian companies referred to above lagging behind. Over the same time period, their average return has been +0.5% while the ASX small resources share price index has added 17%.


John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


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