tactical trader

Back in March I posted about my research into Uranium and stocks that would allow us to take advantage of the anticipated bull market - a tricky business due to the lack of a futures market for Uranium and the lack of Uranium related products like ETFs or traditional funds.

I was interested to read a recent report by Richard Karn (who I assume is not the same Richard Karn who played Al Borland on Home Improvement ) that suggested that investing in Uranium related mining stocks would not allow an investor to mimic the performance of Uranium itself. While this may be true over the longer term, my recent review of the stocks I identified in March shows this has not been the case so far.

For my review I first looked at the change in price of Uranium (Uranium Oxide, U₃O₈ to be precise) between February 13th (the date of my initial research) and October 31st. The good news is that the bull move did occur taking Uranium up from $37.50/lb to $60/lb - a gain of 60%.

I then looked at my portfolio of 15 stocks over the same time period and was very pleased to discover that their average gain was 65.17% - slightly better than the underlying commodity.

Out of the 15 stocks only 2 have declined over the period: Agricola Resources plc (down 44.44%) and Northern Continental Resources Inc (down 34.44%). I wasn't surprised by the fall in Agricola as this stock was being hyped up on a number of UK based bulletin boards and magazines earlier this year.

Chart of Northern Continental Resources

The real stars of the portfolio have more than trebled in value over the time period - these include top performer Summit Resources Limited, one of only two Australian companies in the portfolio, posting a gain of 226.47%.

Chart of Summit Resources

With the expected increases in demand for Uranium over the coming years, and the difficulty in obtaining exposure to the market that should hopefully prevent Joe Public from getting involved and making it a hype-fuelled market (like oil), this portfolio should give us some good returns over the long term.