Fabi Lara: Uranium Thesis is Playing Out, Stock Strategies for the Sector
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As positive catalysts emerge more and more rapidly, the uranium sector is attracting renewed interest.
Both retail and institutional investors are picking up on the opportunity attached to the commodity, which has spent most of the past decade in a bear market, suffering from oversupply and poor public perception after the 2011 Fukushima nuclear accident.
Speaking to the Investing News Network, Fabi Lara, an investor and marketing consultant for public companies, explained how she stayed patient after entering the uranium market all the way back in 2014. Being able to make gains even as negative sentiment weighed on the sector was helpful; however, what really kept her going was the fact that the uranium thesis hasn’t played out yet.
That said, her approach to uranium stocks has changed since she first entered the space. While she was previously looking for companies that were conserving cash, but had pounds in the ground, Lara now she sees different opportunities.
Those include small, early stage companies that have good management teams, but aren’t yet understood by investors. More specifically, Lara is focusing on stocks with market caps of less than $10 or $20 million that have not yet released an NI 43-101 resource estimate, but may be examining historical data that has potential.
“I’m looking at smaller companies and selling some of the larger companies that I hold. (I’m) going for the tiny little ones that have a good team, aren’t spending a ton of money on superfluous things, but actually need to get their story out there,” she said.
Lara noted that finding entry and exit points can be tough, but said she makes sure to ask herself whether what she’s buying is cheap. At the moment, she’s noticed that some uranium stocks are shifting from being cheap to fairly priced.
In general, she doesn’t see herself exiting the industry as a whole for quite some time.
“I don’t know exactly when I will exit the uranium space, but I don’t believe that I will be exiting until the spot price of uranium is at least above something like US$80 per pound. The cost to produce has gone up by quite a bit, and I definitely see more and more and more demand for the next 10, five, 20 years — pick a number,” she said.
Watch the interview above for more from Lara on how she’s approaching the uranium market.
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Securities Disclosure: I, Charlotte McLeod, 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
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