Email of the day
Comment of the Day

March 24 2011

Commentary by Eoin Treacy

Email of the day

on nuclear safety companies:
"With the earthquake and tsunami catastrophe in Japan it is very likely that safety around nuclear energy will increase. I have unsuccessfully been trying to think of any stock which could benefit. Does Fullermoney have any suggestions? Thank you.

Eoin Treacy's view Thank you for this interesting question and we would welcome subscribers' thoughts on the subject. I'm not sure that there are any clear winners in the nuclear sector following this accident but here are some initial thoughts.

Areva is focused on just about every portion of the uranium fuel cycle from mining to reprocessing and also focuses on safety protocols. However, this latter aspect does not appear to be reflected in the share price.

Jokwang Ili Co, listed in Korea produces automatic safety relief valves for nuclear reactors but the share appears to be highly cyclical and thinly traded.

Tacmina Corp, listed in Japan, produces a range of pumps, some of which are used in nuclear reactors. The share has rebounded well from last week's decline and has pushed back up into the overhead range.

UK listed Atkins (WS) is primarily a transport related consultancy but also has operations in the nuclear industry. The share is currently rallying from the lower side of a first step above its base and a sustained move below 650p would be required to question potential for some additional upside.

US listed Shaw Group is probably the most likely to benefit from increased safety concerns. It will be assisting Toshiba "with mitigation, remediation and recovery services" at the Fukushima nuclear plant. The share fell to retest the lower side its yearlong range following the accident but has bounced and would need to sustain a move below last week's low, near $27.60, to question scope for some additional higher to lateral ranging

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