Four Ways to Play the Nuclear Deal
As the global economy continues to get more and more competitive, alternative energy remains a catalyst that could differentiate a nation from being a powerhouse versus just an average country .
It appears that the United States agrees: It's decided to give 4 utility companies nearly $18.5 million in federal financing to build a new generation of nuclear reactors. One benefit of utilizing nuclear energy is cleanliness. With the threat of global warming looming the globe, countries are looking for alternative forms of energy to satisfy their needs.
As for nuclear energy, no carbon dioxide is emitted from the energy generated by the plants. In fact, research indicates that nuclear plants emit less carbon dioxide than any other production mechanism. Additionally, nuclear-energy plants produce much of the electricity that fuels the US’s economic growth. Lastly, they power new industrial technologies that boost the nation's GNP.
Although the future of nuclear energy appears to be bright, there are some downfalls that must be overcome -- the biggest one being the cost of generating power via nuclear energy. These include construction costs of building plants, operating costs of running the plants and actually generating the energy, costs of disposing waste generated from the plants, and costs of decommissioning the plants.
In addition to these profitability concerns, there are various technical and regulatory issues that must be faced. And lastly, nuclear energy could stir up the fear of terrorism, in that the plutonium produced in one way to generate nuclear energy could be used to produce nuclear weaponry.
Regardless of where you stand on the use of nuclear energy, the Utilities Nuclear Deal will most likely influence the following equities:
1. NRG Energy Inc. (NRG), which is up 43% from a March low of $16.34 to close at $23.35 on July 8
2. Scana Corp. (SCG), closing at $32.14 on July 8 after witnessing a March low of $26.37; an increase of 22%
3. Southern Co. (SO), up 15% after closing at a low of $26.81 in March to close at $30.92 on July 8
4. Market Vectors Nuclear Energy ETF (NLR) rebounding nicely after its March low of $14.91 to close at $20.41 on July 8; a jump of 37%.
When dealing with the previously mentioned equities, it's imperative to keep in mind that they involve risks. The best way to alleviate these risks is to utilize an exit strategy. According to the latest data from www.SmartStops.net, here are the price levels where the uptrend of these stocks would be over: NRG at $21.80; SCG at $30.65; SO at $29.70; NLR at $20.14. Be aware that these levels change daily.
Join Hoofy & Boo as they school you on how to "Know Nukes!"
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And this prodigious gubmint funding will be spread over 4 companies... I'll be surprised if it moves their stocks >0.01%.
Don't give up your night job, Chuck.
