For the past few months, I've been tracking a new development in the uranium space.
One that could instantly kick the lagging sector into hyperdrive.
It has to do with an obscure Commerce Department rule that industries can use if foreign markets are impeding American business and safety.
A few weeks ago, I was confident enough that this rule was going to come into play soon, so I wrote to you about it, saying:
Under what's called a "Section 232 Petition" [of the 1962 Trade Expansion Act], the U.S. Commerce Department can limit the amount of a commodity coming in from other countries, thereby creating a more robust domestic market.
Section 232 was activated in January when two American uranium producers filed it, citing "a significant detrimental impact on the national, energy, and economic security of the U.S. and the ability of the country to sustain an independent nuclear fuel cycle."
The Department of Commerce must now initiate an investigation, after which the Secretary of Commerce - Wilbur Ross - will have 270 days to prepare a report.
And then the president has 90 days to act. So all this is less than a year away.
Trump has already signaled his support for the U.S. nuclear industry on multiple occasions. My gut says he will support domestic uranium mining in some way.
Section 232 asks for requiring 25% of U.S. demand to be met with American uranium. That would be up from 3% today, and create lots of jobs and investment. Seems pretty Trumpy.
Well guess what?
Bloomberg was out with an article about this yesterday - a month after I alerted you to it. The headline read:
In short, the problem is that around 90% of uranium delivered to U.S. nuclear reactors comes from foreign countries, the bulk of it from Russia or Russia-controlled nations that end in "stan."
That's far more reliant than we ever were on the Middle East for oil.
It's a precarious position considering 20% of America's clean electricity comes from nuclear.
Let me be clear what this means: The president could take action that instantly requires 25% of U.S. uranium demand be met with domestic supply.
That would be a 733% increase overnight.
The price of uranium would have to rise by many multiples to create a market robust enough to get that American uranium out of the ground.
Related stocks would go up by hundreds - if not thousands - of percent.
This is not hyperbole. This has happened before. Google "uranium bull 2007". You'll find Wikipedia and New York Times articles about it.
Some stocks went up more than 100,000%. That is not a typo.
It's not hard to see that happening again.
Just on that Bloomberg article alone, which said Trump "plans to" act on the matter, Energy Fuels (NYSE: UUUU), one of the companies that filed the petition with the Commerce Department, went up 17% overnight. It's up 76% in the short time since it's filed the petition
I've been saying Trump was going to be a positive catalyst for the uranium industry for over a year now. I even told you I had his "nuclear codes."
Investors who followed that research, which you can see here, have been in on the mini-bump we've experienced so far this year in uranium.
Much more is on the way - 76% is nowhere close to 100,000%. There will be silly times ahead in uranium.
Call it like you see it,
Nick Hodge
Nick is the founder and president of the Outsider Club, and the investment director of the thousands-strong stock advisories, Early Advantage and Wall Street's Underground Profits. He also heads Nick's Notebook, a private placement and alert service that has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world. For more on Nick, take a look at his editor's page.