Nuclear indexes track company performance by industry segment 

You can't tell the players without a scorecard

For people entering the nuclear industry for the first time, the usual question is how to present your qualifications to an employer.  However, there is a second question in these uncertain economic times. It is how do you qualify a potential employer and their industry, and, the performance of the firm in its industry segment?

Working for a nuclear utility is not a sure thing.  Exelon, the largest nuclear utility firm in the U.S. just laid off hundreds of its employees in May as a cost cutting measure. The reason is electricity demand is down in this recession as factories close and people spend less money on consumer goods, cars, and entertainment.  This means you need to look before you leap and a review of a firm's financials is a good place to start.

The revival of the nuclear industry on a global basis has generated several new developments in the financial field. These are indices and Exchange Traded Funds (ETFs) which are a basket of stocks that is bought and sold on a stock exchange as if it were a single stock. They track the stocks of nuclear energy firms in five broad segments.

Indices and ETFs are important tools for intelligent investing. They are even more important for evaluating how well a company is doing and how well it does comparatively in its industry segment. 

These tools are valuable for measuring and benchmarking stocks in an industry and the industry itself provided they are not too heavily weighted to one segment of the industry.

Investors who used broadly constructed and carefully measured indices can see a wide spectrum of performance information for their stock portfolios, mutual funds, and the market overall.

Potential employees can see the same information and make an informed assessment of the strength of a company, its industry segment and the nuclear industry overall.

Three indexes no waiting

Three groups publish an index on the nuclear industry and its suppliers including uranium. They are briefly described below.

Standard & Poors (S&P) Global Thematic Indices now includes the S& P Global Nuclear Index which is composed of the largest publically traded firms globally in the nuclear energy business. The breakdown is by nuclear energy production and nuclear energy materials, equipment, and services.  An S&P Factsheet has more details about the index.

Van Eck Global launched a "Market Vectors Nuclear Energy Exchange Traded Fund (NLR) which follows the DAXglobal Nuclear Energy Index (DXNE). It consists of publically traded companies in uranium mining, enrichment, nuclear power plants, and nuclear equipment suppliers. According to the firm the top 10 holdings constitute two-thirds of the index.  A fact sheet on the index explains how it is put together.

The World Nuclear Association Index (WNAI) has a nuclear energy index in association with S-Network LLC. It will be composed of dozens of global nuclear energy companies.  A fact sheet lists the top holdings.

According to WNA the breakdown of its index includes companies in five broad segments of the nuclear industry.  You can use these segments with the other indexes.

• Reactor vendors 
• Construction  
• Nuclear fuels   
• Power Generation 
• Technology, equipment & services

By looking at which segment of the industry your firm is in, you can assess the strength of your potential employer against its peers in that segment.

Thinking about nuclear energy indexes

If you are seeking employment in the nuclear industry, you owe it to yourself to do as much work qualifying your next employer as you expect them to do with you.

Each of these indexes have strengths and weaknesses which the investor will have to evaluate before relying on them. Their respective web sites have a wealth of information including fact sheets, a description of the methodologies used to construct the index, lists of companies tracked, and performance numbers.

You will need all of this information, and perhaps more, to develop an informed choice on which index best suits your investment objectives. Note that these indexes are not recommendations to buy or sell any specific stock.

If you want more information about a specific company, dive into Google Finance or Yahoo Finance for a wealth of free information. 

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