Nick Hodge, Co-Owner of Digest Publishing and editor of Foundational Profits and Hodge Family Office, joins us to review the improving macroeconomic data and health of the economy for this year, along with some select opportunities in US equities, the continued bullish outlook for uranium stocks, and how he is moving forward his positioning in the copper stocks.
We start off reviewing the improved economic data around the ISM manufacturing numbers, the jobs report beat, the much better-than-expected GDP number, and improving consumer sentiment that is pointing to a healthier US economy that many envisioned for this year and that we may not see the severe economic contraction or recession that worse data last year was pointing to. We also touch upon some of the nuances behind the recent GDP growth and jobs number coming from the government’s role in bankrolling and fueling it, but he makes the point that regardless, those numbers remain the inputs that the markets are using to trade to new all-time highs, and the data points Fed is using to delay needing to cut rates. Nick points out that while the large moves in mega-cap tech stocks are getting to be crowded trades, that there are other less crowded trade opportunities in healthcare, insurance, and defense in the general equities that look appealing.
Next we get Nick to weigh in on where we are at in the continued surge higher in the uranium sector, and a number of the fundamentals regarding increasing demand and constrained supply that are underpinning this megatrend. We also discuss that even though many of the uranium equities have had very big moves to the upside, that they still have more room to catch up to large run higher we’ve seen in the spot pricing. When compared to the underperformance of gold equities to the gold price moves, Nick still sees more opportunities for the uranium equities to catch up to spot prices and is more animated by the uranium sector than the gold sector at this time. He discusses the concept of being able to trim profits along the journey in a hot sector like uranium while still remaining bullish and adding at the end of last year to Energy Fuels (UUUU) (EFR.TO). He also thinks some smaller companies that haven’t made big moves yet, like Lattitude Uranium (LUR.CN), ATHA Energy (SASK.CN), Kraken Energy (UUSA.CN), Stallion Uranium (STUD.V), and Cosa Resources (COSA.V) may represent intriguing value propositions and he is doing more due diligence on these names.
Wrapping up, we get Nick’s outlook for how the copper sector will continue to evolve, balancing out the medium-term to longer-term fundamentals, with the divergence we’ve seen the last few years in the copper producers versus the stark underperformance of most copper junior developers and explorers. He discusses the different timeframes he has, now that the economic picture is improving in the US, where he is more willing to start positioning in the large-cap base metals producers with good copper exposure like Rio Tinto (RIO) or Freeport-McMorRan (FCX) directly or through country ETFs with large weightings to these companies. Additionally, he notes that there are well-trading liquid companies like Southern Copper (SCCO), Ivanhoe Mines (IVN.TO) (IVPAF), and Filo Corp. (FIL.TO) (FLMMF) that investors can look to accumulate on dips. Nick also highlighted a few junior positions he finds attractive in Gladiator Metals (GLAD.TO) (GDTRF), Hannan Metals (HAN.V) (HANNF), and Palamina Corp (PA) (PLMNF).
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