Alpha Buys: UEC @ $1.423

It appears that this stock has bottomed and will be heading higher over the next year or so. Due to its “glowing” nature, the market for uranium is in its early stages of a long term, multi-year bull market. However, UEC is a developmental company that will not start to see U production until sometime in 2010, so caveat emptor.

The big driver for this stock will be the shortage of uranium going into the future. Contrary to what some of you city-slickers think, you just don’t go out and start a uranium mine tomorrow. You’re looking at seven to eight years of development in a lot of cases. Then there’s the government extracted pound of flesh that is always due….

I also see consolidation in this industry as players look to jockey for position.

Plus, our old/new friends, the Chinese, are at it again, buying up beaucoup properties to mine the funky stuff for their future utility plants. Yeah, you Chinese will get my uranium when you pry it from my cold, dead, radioactive fingers. Go light a candle in the wind.

I like the prospects for this stock, given the fact that I have a friend who is a highly regarded global mining consultant, who thinks highly of the management of this company. He particularly likes the properties and acreage they have in Arizona, Colorado, New Mexico, Texas, Utah and Wyoming. It is prime and full of mineral. (Unbeknownst to the rest of Americans living on the coasts, the land in the mountain West is acutely radioactive, so stay away. Stay where you are. Don’t plan on coming out here to live. It’s dangerous.)

This is a long-term buy and hold. Consider it a call option on uranium with no expiration.

(Disclaimer: Buying stocks like this could potentially be penny-wise, but pound foolish—if that makes any sense to you. Consider the risks here. Have you ever seen uranium? Does it even exist? For all you know, some Madoff-like space alien could have made all this shit up, and our “nukular” [sic] plants are running off of bug doo-doo. Due diligence, friends, due diligence. Know the risks. Warning: this company is based out of Austin, Texas, which of course is the home of steers and queers. So sorry if I offended any steers.)