11 Best Uranium Stocks To Buy
In this piece, we will take a look at the 11 best uranium stocks to buy. If you want to skip our overview of the uranium industry, and an analysis of the recent trends, then read 5 Best Uranium Stocks To Buy.
Advances in manufacturing and technology have enabled humanity to manipulate materials in transformational ways to use basic materials such as sand for advanced purposes like high end computing. For instance, modern day lithography, which is the process of making semiconductors, uses light to print billions of circuits on refined silica sand and silicon dioxide. These semiconductors power the world in the form of chips present in laptops, notebooks, airplanes, and cars.
Another significant leap in materials manipulation is nuclear technology. Nuclear technology is the most efficient technology for generating energy, and it comes in two flavors. The first of these, and the most widely used, is the less energy intensive process called nuclear fission. Nuclear fission bombards radioactive materials with neutrons to make their atoms split and generate more neutrons. This creates a chain reaction that generates a massive amount of power. Estimates show that a gram of fissile material can generate a whopping one megawatt of electric power, enough to power 750 homes.
The second flavor of nuclear technology is nuclear fusion. Nuclear fusion 'fuses' two atoms together which leads to significant energy generation. However, since the energy requirements of this process are equally high, all of the electricity produced in the world's nuclear power plants is from nuclear fission. Nuclear fission plants use either uranium or plutonium as their fuel, with plutonium being significantly more powerful since less plutonium can be used to reach critical mass when compared to uranium.
However, uranium is more widely used since it is less radioactive and even safe to touch in its in active state. Uranium is also easily available, and its production and price are subject to the same constraints as any other commodity. For instance, during the coronavirus pandemic, global uranium production declined and the market became tighter particularly as the Sprott Physical Uranium Trust came online and bought a quarter of the world's triuranium octoxide, commonly known as yellowcake uranium. These purchases, coupled with the disruption ushered in by the Russian invasion of Ukraine and political turmoil in Kazakhstan caused uranium prices to soar to $63.75 in April 2022.
While most of the world's attention is often focused on solar and wind power for renewable and emissions free energy generation, the fundamental nature of these technologies leaves them vulnerable to the structure of the modern day energy demand. Global energy and electricity requirements require 24/7 continuous power, and higher wattage during peak hours. As an example, noon and afternoon are times of peak consumption during the summer; however, homes also require power at night. This segregates global power demand into two segments. The first is the base load i.e. power that must always be available, and the second is peak load, which is the greatest amount of electricity demanded.
Within these, solar and wind power are suitable for peak load but they cannot adequately keep up with the base requirements. After all, solar panels can generate electricity only when the Sun is shining, and windmills can only spin if there's wind around. Therefore, regions that seek to completely shift to renewable for their energy mix are often left scrambling for environmentally friendly base capacity, and this is where uranium's role in the emissions free future comes into place.
We delved deeper into these dynamics as part of our coverage of the 15 Countries with the Largest Uranium Reserves in the World, which uses data from the Brookings Institute to show that among nuclear, wind, and solar, nuclear is the only power generation platform that provides a financial benefit after setup and operating costs are factored in. And in case you're wondering, Australia, Kazakhstan, and Canada have the largest uranium reserves in the world.
Nuclear energy is also starting to make inroads in the data center industry, which is quite power intensive. Right now, all the hype in the industry is about Small Modular Reactors (SMRs), and there was a major development in this arena in October 2023. This was when SMR maker NuScale Power Corporation (NYSE:SMR) teamed up with data center infrastructure provider Standard Power to develop 2GW nuclear powered data center facilities.
Uranium's potential for the renewable energy future has not gone unnoticed by hedge funds as data from Bloomberg shows that hedge funds are upping their bets on uranium stocks as the price of the commodity marks a 125% growth since 2020. So what are the uranium stocks that hedge funds are buying? We took a look and some top picks are BHP Group Limited (NYSE:BHP), NexGen Energy Ltd. (NYSE:NXE), and Cameco Corporation (NYSE:CCJ).
Our Methodology
To compile our list of the top uranium stocks to buy, we ranked the U.S. stock holdings of the Global X Uranium ETF (URA) by the number of hedge funds that had bought the uranium stocks in Q2 2023.
11 Best Uranium Stocks To Buy
11. Uranium Royalty Corp. (NASDAQ:UROY)
Number of Hedge Fund Investors in Q2 2023: 5
Uranium Royalty Corp. (NASDAQ:UROY) is a small Canadian company headquartered in Vancouver, Canada. It owns interests in uranium mines in the U.S. and in Canada. The firm is currently busy building its uranium inventory, as it announced in October that it has received purchase commitments of one million pounds of the commodity.
As of June 2023 end, five out of the 910 hedge funds part of Insider Monkey's database had bought Uranium Royalty Corp. (NASDAQ:UROY)'s shares.
Just like NexGen Energy Ltd. (NYSE:NXE), BHP Group Limited (NYSE:BHP), and Cameco Corporation (NYSE:CCJ), Uranium Royalty Corp. (NASDAQ:UROY) is a top hedge fund uranium stock pick.
10. Energy Fuels Inc. (NYSE:UUUU)
Number of Hedge Fund Investors in Q2 2023: 5
Energy Fuels Inc. (NYSE:UUUU) is an American uranium miner and seller. The firm announced a strong set of earnings results in November 2023, that saw its revenue grow by $8 million dollar annually over the year ago quarter on the back of 180,000 pounds of uranium sales.
Insider Monkey took a look at 910 hedge funds for their Q2 2023 investments and discovered five Energy Fuels Inc. (NYSE:UUUU) investors. Out of these, the largest shareholder is Daren Heitman's Azarias Capital Management as it owns 738,601 shares that are worth $4.6 million.
9. Centrus Energy Corp. (NYSE:LEU)
Number of Hedge Fund Investors in Q2 2023: 6
Centrus Energy Corp. (NYSE:LEU) is another American company, and one that specializes in low enriched uranium (LEU). The firm is currently producing high assay LEU in Ohio as part of a government project to demonstrate production viability. Its shares are rated Buy on average and analysts have set an average share price target of $65.67.
By the end of this year's June quarter, six out of the 910 hedge funds polled by Insider Monkey had held a stake in Centrus Energy Corp. (NYSE:LEU).
8. NuScale Power Corporation (NYSE:SMR)
Number of Hedge Fund Investors in Q2 2023: 12
NuScale Power Corporation (NYSE:SMR) develops nuclear power plants and is headquartered in Portland, Oregon. It made quite a bit of noise in the media in October 2023 when a short seller report alleged that it had sold nuclear reactors to a fake customer. NuScale Power Corporation (NYSE:SMR) denied the charges in a clarification and provided some details about its customers in a follow up.
After digging through 910 hedge funds for their second quarter of 2023 shareholdings, Insider Monkey discovered that 12 had bought NuScale Power Corporation (NYSE:SMR)'s shares.
7. Ur-Energy Inc. (NYSE:URG)
Number of Hedge Fund Investors in Q2 2023: 13
Ur-Energy Inc. (NYSE:URG) holds interests in uranium mining projects in America. Its earnings report for the third quarter of this year saw the firm share that global uranium demand outstripped supply during the quarter, allowing Ur-Energy Inc. (NYSE:URG) to sell 190,000 pounds of uranium.
In the previous quarter, 13 out of the 910 hedge funds part of Insider Monkey's database had invested in the company. Ur-Energy Inc. (NYSE:URG)'s biggest investor out of these is Michael Hintze's CQS Cayman LP due to its $13.6 million stake.
6. Denison Mines Corp. (NYSE:DNN)
Number of Hedge Fund Investors in Q2 2023: 14
Denison Mines Corp. (NYSE:DNN) is a Canadian uranium mining company headquartered in Toronto, Canada. The firm's primary uranium production site is in Saskatchewan, and in November 2023, Denison Mines Corp. (NYSE:DNN) announced that it had successfully recovered 14,400 pounds of uranium from a feasibility test at the site.
By the end of Q2 2023, 14 out of the 910 hedge funds polled by Insider Monkey had held a stake in Denison Mines Corp. (NYSE:DNN). Steve Cohen's Point72 Asset Management owns the largest stake among these, which is worth $5 million and comes via 6.2 million shares.
BHP Group Limited (NYSE:BHP), Denison Mines Corp. (NYSE:DNN), NexGen Energy Ltd. (NYSE:NXE), and Cameco Corporation (NYSE:CCJ) are some top uranium stocks to buy.
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Disclosure: None. 11 Best Uranium Stocks To Buy is originally published on Insider Monkey.
