The earthquake and subsequent nuclear disaster in Japan in March moved Germany to temporarily shut down seven of its nuclear plants. Nonetheless, India plans to build 30 nuclear plants in the next 20 years, and China has 77 reactors that are in the construction or planning stages, according to World Nuclear Association.
Kate Schapiro of Sentinel International Equity Fund believes that the nuclear-power renaissance will be placed on hold, not halted. “New technologies are in development, particularly in China, to look at safer ways to construct nuclear-power facilities,” Schapiro says. She picks Cameco (NYSE: CCJ; Price: $27.25), which is the world’s largest publicly traded uranium producer, as a long-term hold. The stock price is down about one-third from its recent peak in February.
Schapiro predicts that the natural-gas market will benefit from Japan’s temporary moratorium on the use of nuclear energy, and she believes that natural-gas demand will rise over the long term in other countries. She favors Britain’s BG Group (formerly British Gas) (OTCQX: BRGYY [ADR]; Price: $114.12). She also likes ABB (NYSE: ABB [ADR]; Price: $26.47), which manufactures power and automation technologies and systems, because the company’s high-powered transformers always will be needed, regardless of the energy source that’s at the local power plant, she says.
Schapiro suggests that you focus on companies that spend money on research and development.
Clark Gates of Craigmillar, which focuses on companies that invest in clean energy, such as wind and solar power, believes that the devastation in Japan won’t change industry trends toward cleaner energy. He holds Market Vectors Nuclear Energy (NYSE: NLR; Price: $22.46) and Guggenheim Solar ETF (NYSE: TAN; Price: $7.53), which are exchange-traded funds (ETF), to diversify and capture the emerging technologies that are within those industries.
“Having an ETF exposes us to all of these technologies,” Gates explains. As they mature, he says, we will know which technology company in which to invest more.