Investing Daily

Don’t expect wind and solar energy stocks to perform well this year. Even with demand likely to bounce back, both industries face massive overcapacity and falling profit margins.

To meet the military's increasing demand for electricity, the Dept of Defense has intensified its search for permanent, on-site generation. Nuclear power is one option.

Nuclear power generation will play a vital role in meeting rising global demand. That nuclear power is a carbon-free source is only one factor in its rising profile; the operating economics are also highly competitive. Total global generation from nuclear sources is projected to grow close to 40 percent by 2030, with developing world countries such as China and India driving much of that growth.

Nuclear power fits in well with this mix of power generation technologies and helps to address the three key goals of meeting power demand, enhancing energy supply security and minimizing environmental impacts.

Booming electricity demand and more stringent environmental regulations are powering growth for nuclear power and alternative energy. Here’s how to profit.

I recommend a small number of stocks involved in the uranium industry as part of what I call a field bet. The concept is simple: The uranium mining business is highly risky and full of company-specific pitfalls.

We’ve covered the nuclear industry in the past in The Energy Strategist and made some gains in nuclear-oriented stocks back during the big bull market in the group in 2006 and 2007. Fortunately, we recommended taking some profits ahead of the massive decline in the group in late 2007. The sector is depressed, and some old TES favorites are back on the bargain rack, even as uranium prices tick higher again. It’s high time we revisit the theme.

Nuclear power is making a comeback. That spells rising demand for the key nuclear fuel, uranium.

In the wake of the 1986 Chernobyl nuclear disaster in the Ukraine, public opinion in Europe turned increasingly anti-nuclear. But, sentiment is clearly shifting back in favor of nuclear and several nations are now taking steps to actually extend the operating life of existing plants or build brand new reactors.

NRG Energy filed an application to build two new reactors at its current Bay City, Texas, facility on Sept. 25, the first such application in the US in 32 years.

Just less than a year ago on July 26, 2006, I inaugurated my uranium field bet to play the long-term growth in nuclear power and the wave of demand for uranium to power these plants. The field bet has proven successful, up on average more than 100 percent since its inception and up 25 percent so far in 2007.

France remains a key global leader in the use of nuclear power, garnering more than 80 percent of its electricity from nuclear plants. The recent election of...

The supply/demand balance for uranium is tighter than for just about any other major commodity; supply of natural uranium from mines just isn't enough to cover even current demand. And with a global building boom for nuclear power plants underway, demand for uranium is only going to rise.

With uranium spot prices spiking above $50 per pound, the uranium plays are on a move. One of our companies which is a play on biofuels recently formed an alliance with DuPont and made several other key investments to enhance its exposure to biodiesel and ethanol. Some of the concerns surrounding the contract drilling group that I outlined back in June have taken a toll, but the stocks are now trading at more attractive levels and have started to perk up again.

My view remains that fears of an economic slowdown in the US are putting a cap on rallies in the group. While this does little to change the long-term bullish picture for energy, investors can't afford to totally ignore the short term. However, regardless of a potential slowdown, nuclear power and uranium mining should still perform well.

Many of the most prominent members of the pro-nuclear camp are members of an organization known as Environmentalists for Nuclear Energy (EFN), headed by nuclear physicist Bruno Comby. Mr. Comby has been so kind as to agree to submit the following piece outlining his case for nuclear power and why he believes organizations like Greenpeace are making a critical error in their opposition to nuclear technology.

Ecological organizations such as Greenpeace have an anti-nuclear standpoint.

As global demand for power continues to rise, nuclear power is an excellent alternative to coal or natural gas fired plants. Nuclear power is the cleanest and most efficient fuel across the bar. With little to no polluting emissions, as well as security and lack of political risk, nuclear power appears to be the best fit among new energy sources. Increased use of nuclear energy will also create excellent investment opportunities in the uranium mining field, as demand for the raw material which fuels the process increases.

Nuclear power is an excellent option in times of high energy costs.