Nick Hodge: You Ain’t Seen Nothing Yet from Uranium

Energy Investing
Uranium Investing

Nick Hodge, founder of the Outsider Club, shares his thoughts on the current resource market with a particular focus on uranium in this New Orleans Investment Conference interview.

Interview conducted by Charlotte McLeod; article text by Georgia Williams.

At this year’s New Orleans Investment Conference, which was held earlier this month, the Investing News Network sat down with Nick Hodge, founder of the Outsider Club, to discuss the current resource market with a particular focus on uranium.

Despite uranium performing well for most of the year, the current price is still well below what is needed to start new projects and even make the current uranium projects lucrative.

The uranium analyst noted that uranium ETFs are down roughly 20 percent making it the ideal time to get in on some energy stocks that are likely to gain value in the coming years.

“I think you’ll see a lot of selling between call it now Halloween 2018 and when we eat turkey later this year, and so cheap assets that are quality are only going to get cheaper and that’s the time that I would be looking to buy them,” Hodge said.

The spot price of uranium has steadily trended up for the majority of the year, save for a tiny period in June when the price slipped slightly. Currently, the spot price of U3O8 is US$29.10, an almost US$7.00 increase since July.

While the spot price has continued its upward trajectory it will need to gain at least US$15-US$25 dollars to entice miners and explorers to restart production and discovery.

Hodge credited the steady incremental rise to a variety of factors, including a depleting spot surplus as the motivation behind the price growth.

“But look, you ain’t seen nothing yet because again nobody’s making money at that price, you still need US$60, US$65, US$70 uranium to make money and we’re just not there yet,” he said.

He believes the dwindling surplus will force the price up as uranium consumers look to meet their regular and growing demand.

“I think at some point it’s going to be like getting hit by a freight train when the utilities come back into the market — a very rapid ascent,” Hodge added. “I think they [utility companies] buy in the spot market until they can’t and then you’ll see some sort of dramatic rise in the uranium price.”

Listen to the interview above for more insight from Hodge. You can also click here to see the full New Orleans Investment Conference playlist on YouTube.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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

The Conversation (1)
david ah ejat
david ah ejat
15 Nov, 2018
Pipe dreams. The equities are not moving as much as they should as the spot price increases. There is a disconnect. It could be another 3 to 4 years before all the overhang inventory is cleared .according to wana it can take along time for the overhang to clear. Bright future probably yes. Immediately next 2 years probably not