What Happened to the 'Nuclear Power is Dead' Theory? URRE, URZ, URG, UEC, and CCJ Under the Microscope

By Bryan Murphy

Published: May 27, 2011 9:09:08 AM PDT

Print Uranium Resources, Inc. (URRE), Cameco Corp. (CCJ), and Uranium Energy Corp. (UEC) are up 7%, 3%, and 8%, respectively.

And it's not just a fluke today that's apt to fade by Monday. Nearly all these stocks have worked their way back above at least some key technical hurdle, and all of them have been pointed higher - albeit to various degrees - for a few days now.

What happened to foster such a turnaround? That's just it - for the companies, nothing really changed. The paradigm shift almost entirely happened between investors' ears.

Yes, UEC, URRE, CCJ, URG, and URZ are all still well under their February peaks (uranium stocks had already started their pullback when the Fukushima meltdown began). That's not the point, however. The mental tide appears to have turned this week, and now that it has, investors can make their way in with a much higher margin of safety.

There's a strong foundation being laid for these stocks as well. Despite the knee-jerk disdain for all nuclear power shortly after Japan's disaster, previous plans to expand the usage of nuclear power plants are back on course. Ironically, Japan's neighbor China has the nuclear power plant (proverbial) pedal to the metal.

As for which stocks are better to own, that depends on your risk-to-reward appetite.

Uranium Resources is currently producing (again), but on a limited basis... nowhere near 2008's level. But, URRE is not profitable, and isn't expected to be anytime soon. That said, URZ isn't profitable either, but at least for good reason - Uranerz Energy also isn't in production yet, though it should be within a year.

Uranium Energy Corp. got it's mining operations online late last year, though we've yet to see any revenue reports. Ergo, UEC is not currently a profitable name, and may struggle to justify value for a couple of quarters.

That leaves Cameco and Uranerz Energy. The former is profitable, while the latter is not. CCJ trades at 24.2 times its trailing earnings, and 17.5 times its forward-looking earnings. That's high by most standards, but then again, it's the only major name in the U.S. that's actually up and running - a premium is deserved for that. URZ has no P/E or even a P/S ratio, as there's no top or bottom line yet.

While Cameco seems like the no-brainer choice since it's actually doing something tangible (Dennison Mines (DENN) also is an active uranium miner, but not a pure uranium play), don't discount the potential upside of a company that's pre-operational. The market trades stocks based on where they think companies are going, and many of these stocks are going to be generating revenues - and perhaps even profits - later this year and early next year when uranium prices are expected to recover to the $70/$75 per p