Market Overview

How to Trade the Japanese Radiation Scare (LDK, TSL, HSOL, FAN, PWND, GEX)


There are growing concerns both inside Japan and internationally regarding how the country's food and water supply have been affected by the ongoing troubles at the Fukushima Daiichi nuclear power plant that was severely damaged by the earthquake and tsunami that hit Japan earlier in the month and a series of fires and explosions that have rocked the facility since then.

It was reported earlier in the week that the radiation levels found in the Tokyo water supply were more than double the recommended limit for infants. Although the authorities said that there shouldn't be any immediate danger to infants who drank the water, they also said that parents should avoid giving it to their babies.

In response to the finding, the government began to distribute bottled water to families with infants and is considering importing bottled water because there has been a rush by consumers to stockpile bottled water because of fears that drinking tap water could be dangerous.

The concerns over radiation leaks from the nuclear facility entering the food supply have led to the governments of several countries, including the United States, Russia, Canada and Australia, restricting imports of Japanese milk and food products from the areas nearby the the Fukushima Daiichi nuclear power plant.

It was also reported that at least two of the workers who have been trying to cool reactors at the troubled nuclear facility and get the situation under control have been hospitalized due to high exposure to radiation.

Although some authorities on nuclear power around the world have said that it would be unwise to radically change energy policies due to one incident, nuclear power is getting much less popular throughout the world. Several of the European Union member states are conducting extensive reviews of their nuclear energy safety programs and Germany has gone so far as to shut down several of its oldest nuclear reactors.

If the situation at the Fukushima Daiichi nuclear power plant worsens, it could be a blow to the nuclear power industry but it could also give a huge boost to the prospects of companies with operations in the alternative energy sector, such as wind and solor.

Three companies in the solar power sector that could benefit from the current mood about nuclear energy are LDK Solar Co. Inc. (NYSE: LDK), Trina Solar Limited (NYSE: TSL) and Hanwha SolarOne Co., Ltd. (NASDAQ: HSOL).

The First Trust ISE Global Wind Energy (NYSE: FAN) ETF and the PowerShares Global Wind Energy (Nasdaq: PWND) ETF are two options for investors who are interested in the wind power sector.

For investors who want to invest in alternative energies but would like a more diversified investment, the Market Vectors Global Alternative Energy ETF (NYSE: GEX) is an investment option that is worth taking a close look at.

Posted-In: Long Ideas News Sector ETFs Specialty ETFs Small Cap Analysis Events Global Trading Ideas


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