Gwen Preston of Resource Maven shared her thoughts on junior resource sector sentiment, saying that while the majority of investors in the space are ‘despondent,’ a keen minority are looking for opportunities.
‘The way I look for excitement in my portfolio in the near term is discovery stocks — and uranium,’ she said. ‘I also have a bunch of the portfolio positioned for when the big picture changes, for when investor interest comes into the space. I have a bunch of positions that I think will perform first and best when that happens.’
Preston said uranium is the sector that’s looking the most promising to her right now, followed by gold. When it comes to uranium, she’s encouraged by the fact that US utilities are now looking to buy in a tight market.
‘Uranium is the case study for where copper and nickel and a bunch of these other metals are going,’ she explained, noting that prices always overshoot in a bull market. ‘Uranium is at the point where there actually isn’t supply available.’
When it comes to uranium stocks, the universe remains small — Preston estimates that there are probably only 50 ‘real’ uranium equities available. That means higher prices are likely to lift the whole group. But she reminded investors that risk generally increases as company size decreases. In other words, explorers are more risky than producers.
Preston also spoke about gold, saying that positive catalysts are building for the yellow metal.
‘There’s a lot of bullish forces on gold,’ she said. ‘I don’t know when it’s going to move — if I had to guess, I think it might move in January/February because seasonality plus (other) forces might come together. But it’s equally likely that some sort of stock market crash or recession could be the catalyst as well for gold. The warning signs of that are also rising.’
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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