In a set of recent articles, Marin Katsua argues that investors interested in thorium nuclear tech companies, like Lightbridge Corp (LTBR), should hold off and invest their money somewhere else for now. Just in case you can't think of anywhere else to immediately put your money, Marin solicits it at the end of his article:
Marin has an enviable track record in the uranium sector, with one current pick up nearly 1,600% since he first recommended it to his subscribers 39 months ago. Now he's targeting a little-known company that possesses oil-recovery technology that could reward investors with similar gains.
Maybe Marin's desire to sell you something else has nothing to do with his recommendation that you not buy something. Even so, we don't have to take his recommendation at face value. Here are the three reasons Marin says you shouldn't invest in Lightbridge.
1. The scarcity of competitors raises doubts as to market potential.
2. The old-fashioned status-quo has subsisted this long on pure momentum.
3. Betamax was a better technology than videocassettes, yet failed to scale.
Really, this boils down to one question: Will the decision-makers buy what Lightbridge is selling?
Lightbridge CEO Seth Grae reiterated the answer to this question during a conference call Wednesday, Feb. 22. Their tech upgrades can work in existing and new-build nuclear plants. Although new builds are entering a growth stage internationally, let's consider the conservative cost/benefit scenario of uprating the old plants. Grae says for each plant, decision-makers will spend 10MM to buy the 161% ROI that Lightbridge is selling. With rising wholesale electricity prices amplifying returns, the anticipated ROI looks more like 200, and this is without counting the additional financial benefit of extending the life of the fuel cycle by 17%. Did Betamax offer 200% ROI to decision-makers?
For broader info on Lightbridge, here is my previous article. For deeper info on thorium, you can pre-order Richard Martin's book.
Disclosure: I am long LTBR.
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