The uranium thesis plays out, stock strategies for the sector

Fabi Lara: The uranium thesis is being played out, stock market strategies for the sector


As positive catalysts are emerging with increasing speed, the uranium sector is experiencing renewed interest.

Retail and institutional investors are seizing the opportunity in the commodity, which has spent most of the last decade in a bear market, suffering from oversupply and poor public perception after the nuclear accident in Fukushima in 2011.

Speaking to Investing News Network, Fabi Lara, an investor and marketing consultant for public companies, explained how she remained patient after entering the uranium market in 2014. Being able to make gains even as sentiment negative loomed over the sector was helpful; however, what really got him going was the fact that the uranium thesis has yet to come to fruition.

That said, her approach to uranium stockpiles has changed since she entered space. Where she previously sought out businesses that saved money, but had books in the ground, Lara now sees different opportunities.

These include small start-ups that have good management teams, but are not yet understood by investors. Specifically, Lara focuses on stocks with a market capitalization of less than $10 million or $20 million that have not yet released a NI 43-101 resource estimate, but may be looking at historical data that has potential.

“I look at small businesses and I sell some of the larger businesses I own. (I) go for the very small ones that have a good team, don’t spend a ton of money on superfluous things, but actually need to tell their story,” she said.

Lara noted that it can be difficult to find entry and exit points, but said she made sure to consider whether what she was buying was cheap. Currently, she has noticed that some uranium stocks are going from cheap to reasonably priced.

Usually, she doesn’t see herself leaving the industry as a whole for a while.

“I don’t know exactly when I will leave the uranium space, but I don’t believe I will until the spot price of uranium is at least above something like $80 a pound. The cost of production has gone up by a bit, and I definitely see more and more demand for the next 10, 5, 20 years – pick a number,” she said.

Watch the interview above to learn more about how Lara approaches the uranium market.

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Securities Disclosure: I, Charlotte McLeod, have no direct investment interests in any of the companies mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or completeness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the views of Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence

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