The fight to save our planet from global warming has seen the shift to renewable energy sources increasingly gain traction. Nuclear energy is one of these renewable sources. Most of the world’s nuclear energy is obtained from uranium; an abundant metal mined all across the world.
In 2011, the tragic Fukushima nuclear disaster happened in Japan. This was followed by a drastic fall in the price of uranium. This sent miners on a mission to get demand and supply back in equilibrium. Recently, uranium has been recovering quite well. From 2020, the spot price of uranium rose 37% through August of 2021.
Some investors believe this bull run is nearer to its end, but more optimistic investors believe it is the start of a long and sustained uptrend. With the ever-increasing demand for renewable energy, the future of uranium is certainly looking up. To that end, these are the best uranium companies to invest in at the moment.
1. BHP Group
BHP Group (NYSE: BHP) is a global resources company founded in 1885 in Australia. It is involved in the mining of oil, gas, copper, uranium, zinc, silver, and several other resources from all over the world. In 2020, the company produced 3,678 metric tons of uranium.
BHP’s stock saw its investors enjoy 48% in returns in the last year. The company also pays out handsome dividends on a regular basis, the current rate being $2.02 per share. By June of 2021, there were 23 hedge funds that were holding this company’s stocks. One of those hedge funds is Fisher Asset Management out of Washington, which holds 7.9 million shares worth upwards of $550 million.
2. Rio Tinto Group
Rio Tinto Group (NYSE: RIO) is a mining company headquartered in London. It was established in 1873. It dabbles in iron ore, diamonds, gold, copper, uranium, and many other metals. It owns mines, mills, refineries, power stations, and research facilities all over the world. In fact, it is one of the world’s biggest mining companies.
Over the past 12 months, the company’s shareholders have enjoyed more than 56% in returns. In April, the firm announced its commencement of production of battery-grade lithium in their California plant. Following this news, its shares rallied by more than 1.5%. At the end of Q1 2021, a total of 25 hedge funds held Rio Tinto Group’s stocks, amounting to $1.5 billion.
3. NexGen Energy Limited
NexGen Energy (NYSE: NXE) is a Canadian company that was founded in 2011. It is mainly concerned with the exploration, mining, and development of uranium. One of its most prominent projects is the Rook I project. This project involves 32 mineral claims spanning over 35,065 hectares in the Athabasca Basin of Saskatchewan, Canada.
Early this year, NexGen Energy shares plummeted more than 6% after it announced that a group of underwriters had agreed on a deal offering to buy 33.4 million of the Canadian company’s shares at C$4.50 per share. Despite that, the company’s stock has produced over 222% in returns over the past year.
There are 13 hedge funds currently invested in the company. One such hedge fund in New York’s Falcon Edge Capital, whose position in NexGen is worth upwards of $22 million.
4. Ur-Energy
Ur-Energy (TSE: URE) is a company that was founded in 2004, with its headquarters in Colorado, USA. It is involved in mining, recovering, and processing uranium. It holds 12 uranium mining interests in the US. One such interest is the Lost Creek project. This project consists of 1,800 mining claims and three mineral leases in Wyoming.
In the first quarter of 2021, the company reported earnings per share of -$0.04. This was a deviation from the market prediction by $0.03. However, its shares posted returns of over 152% to shareholders over the last year.
There are four hedge funds currently holding Ur-Energy’s stock. Their positions were collectively worth a cool $6 million at the end of Q1 of 2021. On September 14th, this firm’s stocks skyrocketed by around 15% after uranium prices hit multi-year highs. Morgan Stanley warned that this upward rally might be short-lived, but most investors are digging in for a sustained bull run.
5. Cameco Corporation
Cameco Corporation, which is listed as CCJ in the New York Stock Exchange, is a Canadian company involved in the production and sale of uranium. With interests in Europe and Asia, this firm is the second-largest producer of uranium globally. It accounts for 18% of the world’s total supply.
The company’s quarterly earnings for Q1 2021 were -$0.07 per share. This exceeded the market forecast by $0.01. Quarterly revenue over the same period was $290 million, down 16% from the previous year.
There are 30 hedge funds currently holding on to its stock. One such hedge fund, Florida’s Kopernik Global Investors, owns 9.8 million shares valued at a figure north of $163 million.
Honorable mention: Energy Fuels
Energy Fuels, which is listed as UUUU in the NYSE, has seen its shares rise an impressive 300% over the last 12 months. Compared to the S & P 500 Index’s 33% gain over the same period, this firm is definitely worth taking a look into.
What has led to Energy Fuels’ impressive success? Well, first and foremost, the company’s primary business is uranium. Since uranium prices dropped in 2011, the company has been holding uranium reserves until prices went up. Further, the company paid off all its debt at the end of 2020.
The icing on the cake is that in April 2020, the company announced its move into the rare earth metals space. These metals are used in the manufacture of high-tech gadgets, which makes their demand significantly high. In 2021, their pilot project to move into this space was successful, which most investors believe was the driving force behind the rise in its stock prices.
Conclusion
The nuclear energy space is very likely to see significant growth over the years as more of the world embraces renewable energy. Though uranium is susceptible to material price fluctuations, the future is looking up as more and more uranium-related companies record increasing gains from their stocks.
