Stansberry Radio Interview Series: What “energy insider” Marin Katusa is buying today
Welcome back to the Stansberry Radio Interview Series.
Every Saturday, the Stansberry Radio Network brings you the most valuable ideas from the most intriguing guests from all of our shows.
This week we’re sharing highlights from Frank Curzio’s interview with famed natural resource investor Marin Katusa. Marin is an accomplished investment analyst and the senior editor of Casey Energy Dividends, Casey Energy Confidential, and Casey Energy Report.
Right now, Marin’s excited about what he calls the “European Energy Renaissance.” To learn more – including his two favorite uranium plays today – read on…
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The following is adapted from Episode 245 of Frank’s weekly S&A Investor Radio podcast
Frank Curzio: We’re talking to Marin Katusa, chief energy investment strategist at Casey Research, one of the most connected people in the resource industry. Plus, he has one of best track records for picking resource stocks in the industry. Marin, thank you so much for joining us on S&A Investor podcast.
Marin Katusa: My pleasure, Frank.
Curzio: Marin, the resource sector’s been in a bear market for such a long time, but it seems like you may be getting a little optimistic.
Katusa: Well, I think you have to be selectively optimistic. There are no guarantees in our business, but what you want to do is invest in the best people.
Curzio: Yeah, that makes a lot of sense. I want to talk about one industry that I know you’re getting excited about, uranium. Given where prices are – and uranium prices have recently come down – it seems like a no-brainer investment.
If you take the word “uranium” out and you explain the whole fundamental landscape, people would buy into the industry immediately. But as soon as you mention the word “uranium” they’re like, “Oh, we can’t touch it.” It almost makes me want to buy the industry even more.
Katusa: Frank, I agree with you, but you have to also factor in your timeframe.
If you want to be a successful speculator you’ve got to be patient. You’ve got to just wait for the right time. I call it “alligator” investing. You know, an alligator just hangs out, and when it snaps it goes for it, but it just waits for the perfect time.
The guys who are patient are going to make a fortune in this sector. But you have to be in the right companies. Not all uranium companies are the same…
Curzio: You’re seeing the large guys who can’t make money where uranium prices are hedging. There are other companies out there that don’t hedge at all, that have enough cash to withstand this.
What companies do you buy? Are you buying the ones that are hedged or the ones that are unhedged in anticipation of higher prices?
Katusa: First of all, I would only want to focus on North America, because you’re not going to be able to compete with the Russians in Africa or Australia.
My favorite, which our subscribers have made a fortune on, is Uranium Energy Corp – unhedged. And why do I like that? Because they can pull back their production. They’re not forced to deplete their reserves at zero profit. It makes no sense to me right now to deplete your reserves for no profit. So pull back your production and wait for a better day. And that’s what they’ve done.
The other guys are hedged. They have to deliver the uranium from their own mines. That’s what a lot of people don’t understand. In the ’70s when the uranium companies hedged, the utilities got burned because the companies said, “Well, we’re going to go into the spot market, buy it for half price, and sell it to you for double.” Well, the utilities wised up a bit and said, “No, no, no, it has to come from your mine.” And that’s why you want to be careful.
In our newsletter, we have two [uranium companies]: Cameco and Uranium Energy Corp.
Curzio: I’m going to end with this. Are there any ideas that you could share, maybe something that you’re looking at or something that you like, because a lot of people look forward to your ideas. Can you share maybe a couple of names with us that you’re looking at or that you like?
Katusa: Well, Frank, you’re a very close friend and I don’t mind sharing a few things. I’ve been a huge “table pounder” on a major European energy renaissance.
There’s a whole new game going on in the world today; bringing modern technology – North America-proven, safe technology – to past-producing oil fields that have never seen, for example, a horizontal well.
What is going on in Europe is literally like in Hollywood when it was the silent motion pictures. Never mind 3-D, we’re talking about silent black and white. They haven’t even brought sound to their motion pictures. That’s how far behind their energy sector is. And there’s going to be a lot of money being brought into the European energy renaissance when they bring in sound, then color, then 3-D.
Another area that I highly recommend your listeners look at is when Mexico opens up. The oil fields in Mexico are world-class, and for the companies that get in there, their profits are going to be mind-boggling. I suspect by mid to late 2015 they’re going to have their first auction for their [oil] blocks. That is another area where you want to bring modern technology to past-producing oil fields.
I think those two areas are where you’re not just going to get 300 to 500 percent gains… I’m talking about 30 to 50 times your money, and that is possible in the energy sector.
Curzio: That’s great stuff. Well, Marin, thanks so much for taking the time.
Katusa: You bet, Frank, and travel safe, buddy.
Crux note: If you’d learn more about the uranium market – and why the Russians are laughing at Obama – listen to Frank’s full interview with Marin right here.