Buy oil stocks, but avoid equities that are plays on natural gas and uranium. At least that's the advice of one Sprott Asset Management fund manager. Sprott's $169 million energy and natural resources fund, managed by Eric Nuttall, is bullish on oil, but cannot say the same of its feelings toward natural gas and uranium stocks.
Eric Sprott's Sprott Asset Management, perhaps most known for its founder's gold and silver investments, held stakes in Barrick Gold (NYSE: ABX - News), Eldorado Gold (NYSE: EGO -News), IAMGold (NYSE: IAG - News), MAG Silver (AMEX: MVG- News), Silver Wheaton (NYSE: SLW - News) and Extorre Gold Mines (AMEX: XG - News), among others at the end of the first quarter.
"Emerging economy demand (for oil) growth is outpacing the demand destruction that we are seeing in developed economies, namely United States," Nutall said in a Friday interview withReuters. The fund manager said the price of oil this year should range between $95-$100 and that natural gas prices will remain stubbornly low until 2015 when the U.S. becomes a major natural gas exporter.
Shares of Cameco (NYSE: CCJ - News), the world's second-largest uranium producer, have plunged by a third since the March earthquake that struck Japan led to an unprecedented nuclear fallout and unprecedented declines for nuclear stocks.
"For uranium, I think the outlook is awful. We have many countries effectively deciding to shut down all of their nuclear reactors," said Nuttall, who is underweight on uranium stocks, according to Reuters.
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