today’s top pick.

Today’s Top Pick - according to Fosters

Paladin Energy (PDN. ASX; $1.04/sh; Mkt Cap $871m) – Mandate to restart Japan’s reactors. TRADING BUY

•Japanese Prime Minister Shinzo Abe’s ruling Liberal Democratic Party scored a convincing majority of upper house seats in the weekend vote - securing control of both chambers of parliament and a clear mandate to undertake various reforms to revive the economy. "Abenomics" as the market has called it will be a mix of monetary policy, fiscal spending and a growth strategy to generate a positive cycle for jobs, investment and consumption.

•Along with economic reform initiatives, Abe has openly expressed his preference for nuclear power to recommence in order to cut the nation’s reliance on more expensive foreign energy sources. Reuters recently reported fossil-fuel costs helped drive the local power industry to a collective loss of ¥1.59 trillion ($15.7 billion) in the fiscal year ended March 31, 2013.

•We understand Japanese authorities are currently evaluating applications to restart up to 12 reactors at six nuclear facilities with the approval to be provided by the safety commission and local governments based on upgraded safety measures. Only 2 out of 50 reactors remain connected to the grid, with the restart of reactors to take up to 12mths.

•Any sign of Japanese approvals for restarts together with utilities accepting consignments of uranium under long-term contract after previous deferrals could be the circuit breaker to ignite a positive move in the spot uranium price. Japan previously accounted for ~20 million pounds of uranium annually prior to Fukushima vs total global demand of 177 million pounds.

•Current spot continues to run sub-$40/lb, however many analysts at last week’s Uranium conference in Perth forecast the spot price quickly returning to $70-80/lb in 2014....and let’s not get into the long-term supply shortage expected by 2017/18 – driven by 30 plants under construction in China to be operational between now and 2016!

•We continue to rate PDN as a TRADING BUY on this thematic and can see the stock trading above $1.20/sh upon confirmation Management have signed a strategic investor deal in the next month. Stock was up ~14% last week on a strong operational update in the June quarter.

http://www.fostock.com.au/announcements/paladin-energy-pdn-asx