In this article, we will be taking a look at the 11 best nuclear energy stocks to buy today. To skip our detailed analysis of these stocks and the nuclear energy sector, you can go directly to see the 5 Best Nuclear Energy Stocks To Buy Today.
In light of growing concerns when it comes to the climate crisis, increasing focus is being drawn to alternate forms of energy generation. Nuclear energy is merely one such alternate form, offering immense growth potential and profitability from an investment perspective. Many energy companies are thus beginning to add nuclear energy to their scope of operations, while those companies established with the mandate of utilizing nuclear energy resources, namely nuclear energy pure-plays, have begun to see a marked increase in investor interest in their projects.
Major energy companies such as BHP Group (NYSE:BBL), ConocoPhillips (NYSE:COP), and Exxon Mobil Corporation (NYSE:XOM) have long dominated the market with their sheer profitability and attractive income investing prospects in some cases. Similarly, nuclear energy stocks are beginning to gain an edge because of the expected rise in the use of nuclear power over the coming years. This September, the International Atomic Energy Agency (IAEA) revised its annual projections for the potential growth of nuclear power over the next few decades. The organization’s new outlook for global nuclear capacity for electricity generation by 2050 has increased its high-case scenario by 10%. The high-case scenario envisions about 873 gigawatts net electrical of nuclear-generating capacity by 2050.
The expected growth in the use of nuclear power and rising interest in this resource has resulted in uranium funds soaring from their lows this summer. According to a Bloomberg article published this September, the $1.8 billion Global X Uranium ETF rallied by 30%, while the $1 billion Sprott Uranium Miners ETF skyrocketed by 43% from their lows in July. The Global X Uranium ETF managed to generate $70 million in net flows in August as well.
Photo by Frédéric Paulussen on Unsplash
Let’s now take a look at the 11 best nuclear energy stocks to buy today.
Our Methodology
We have selected energy stocks which are either nuclear energy pure-plays or traditional energy stocks with a growing focus on the use of nuclear power for energy generation, for our list below. The stocks are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest. We have considered key metrics such as their EBITDA growth, revenue growth, liquidity, and more when selecting these stocks.
Best Nuclear Energy Stocks To Buy Today
11. Ur-Energy Inc. (NYSE:URG)
Number of Hedge Fund Holders: 3
Ur-Energy Inc. (NYSE:URG) is an energy company working to acquire, explore, develop, and operate on uranium mineral properties. It holds interests in 12 projects in the US. The company is based in Littleton, Colorado.
The company is well-positioned to capitalize on the expected boom in the uranium industry. The industry is expected to see significant growth in light of decisions by Japan to restart nuclear reactors, and by China to build plants to boost domestic power generation. Ur-Energy Inc. (NYSE:URG) had $43.3 million in cash against its total debt of $12.3 million by this June. This shows a net cash position of about $31 million, meaning the company has significant liquidity. Ur-Energy Inc. (NYSE:URG) also has $15.7 million in finished pounds of uranium, representing upside potential for its share price as this commodity can be marketed at a higher price than the price it currently holds.
Three hedge funds were long Ur-Energy Inc. (NYSE:URG) in the third quarter, with a total stake value of $11.8 million. CQS Cayman LP was the largest stakeholder in the company, holding 10.8 million shares worth $11.7 million.
Ur-Energy Inc. (NYSE:URG), like BHP Group (NYSE:BBL), ConocoPhillips (NYSE:COP), and Exxon Mobil Corporation (NYSE:XOM), is a nuclear energy stock many elite hedge funds are piling beginning to consider today.
10. Centrus Energy Corp. (NYSE:LEU)
Number of Hedge Fund Holders: 3
Centrus Energy Corp. (NYSE:LEU) is a supplier of nuclear fuel and services for the nuclear power industry in the US, Japan, Belgium, and internationally. The company operates through its Low-Enriched Uranium and Technical Solutions segments. It is based in Bethesda, Maryland.
On a year-to-date basis, the company’s LEU segment has generated $123.4 million in revenue, representing an increase from $115.3 million in 2021. Centrus Energy Corp.’s (NYSE:LEU) gross margin has also grown year-over-year from $39.2 million to $63.6 million. Additionally, the company is also shielded from paying income tax for the coming years since its large deferred tax asset was not used in the third quarter. Centrus Energy Corp. (NYSE:LEU) reported revenues of $33.2 million in the third quarter.
Three hedge funds were long Centrus Energy Corp. (NYSE:LEU) in the third quarter, while six hedge funds were long the stock in the previous quarter. Their total stake values were $14.9 million and $14.7 million, respectively.
Diamond Hill Capital, an investment management company, mentioned Centrus Energy Corp. (NYSE:LEU) in its third-quarter 2022 investor letter. Here’s what the firm said:
“We initiated holdings in three new companies in Q3: Douglas Emmet Inc (DEI), United States Lime & Minerals (USLM) and Centrus Energy Corp. (NYSE:LEU). Nuclear power industry services provider Centrus Energy is well positioned to benefit from growth in next-generation nuclear technology, helping provide reliable and carbon-free electricity.”
9. Energy Fuels Inc (NYSE:UUUU)
Number of Hedge Fund Holders: 9
Energy Fuels Inc (NYSE:UUUU) is an energy company engaged in the extraction, recovery, exploration, and sale of conventionally and in situ uranium recovery in the US. The company is based in Lakewood, Colorado, and owns and operates the Nichols Ranch project, the Jane Dough property, and the Hank project in Wyoming. It also owns the White Mesa Mill in Utah.
Canaccord’s Katie Lachapelle holds a Speculative Buy rating on Energy Fuels Inc (NYSE:UUUU) shares as of November 16.
Energy Fuels Inc (NYSE:UUUU) has entered into contracts to supply nuclear facilities until 2030. The company also sold its Alta Mesa project earlier in November for $120 million, a move representing significant profitability since the company had purchased this asset for $13.6 million in 2016. The proceeds from this sale should allow the company to fund its ongoing operations with ease. Energy Fuels Inc (NYSE:UUUU) also has a strong balance sheet sporting over $88 million in cash and marketable securities and $27 million in inventory.
Driehaus Capital was the largest stakeholder in Energy Fuels Inc (NYSE:UUUU) in the third quarter, holding 1.2 million shares worth $7.5 million. In total, nine hedge funds were long the stock with a total stake value of $19.7 million.
8. Denison Mines Corporation (NYSE:DNN)
Number of Hedge Fund Holders: 12
Denison Mines Corporation (NYSE:DNN) is an energy company that works to acquire, explore, develop, extract, process, sell, and invest in uranium properties in Canada. It is based in Toronto, Ontario. The company’s flagship project is the 95% interest-owned Wheeler River uranium project in the Athabasca Basin region in northern Saskatchewan.
Denison Mines Corporation (NYSE:DNN) has sizable physical uranium holdings and an impressive amount of U308 reserves in its Wheeler River project. This project is expected to produce 109.4 million pounds of U308 over a 14-year mine life. Denison Mines Corporation (NYSE:DNN) is also keeping its costs at a minimum with its In Situ Uranium Recovery Process.
There were 12 hedge funds long Denison Mines Corporation (NYSE:DNN) in the third and second quarters both. Their total stake values were $18.8 million and $21.9 million, respectively.
7. NuScale Power Corporation (NYSE:SMR)
Number of Hedge Fund Holders: 13
NuScale Power Corporation (NYSE:SMR) is a company that develops and sells modular light water reactor nuclear power plants to supply energy for electrical generation, district heating, desalination, hydrogen production, and other process heat applications. The company is based in Portland, Oregon.
Jon Windham at UBS initiated coverage of NuScale Power Corporation (NYSE:SMR) shares with a Neutral rating and a $13 price target on October 25.
NuScale Power Corporation (NYSE:SMR) is a leading company in technological development and the regulatory approval process when it comes to companies developing SMR technology. Each of the company’s NuScale Power Modules is capable of generating 77 MWe of nuclear energy. The company’s design also allows for a 60-year operational lifetime of its modules. As of this June, NuScale Power Corporation (NYSE:SMR) had $350 million in cash and no debt. It thus expects to be fully financed for its business plan.
Our hedge fund data shows 13 funds long NuScale Power Corporation (NYSE:SMR) in the third quarter, with a total stake value of $39.9 million.
6. Nexgen Energy Ltd. (NYSE:NXE)
Number of Hedge Fund Holders: 15
Nexgen Energy Ltd. (NYSE:NXE) is an exploration and development stage company working to acquire, explore, evaluate, and develop uranium properties in Canada. The company is based in Vancouver, Canada.
The proven deposits held by Nexgen Energy Ltd. (NYSE:NXE) would allow shareholders to profit from the company in any scenario. The company’s planned production of uranium from its assets can be seen as representing about 15-20% of global uranium production. Nexgen Energy Ltd. (NYSE:NXE) currently holds sufficient cash or current assets to cover all its debt and liabilities. With total liabilities of $70 million including $54 million of long-term debt against a total equity of $325 million, the company has a low debt-to-equity profile.
Nexgen Energy Ltd. (NYSE:NXE) was found among the 13F holdings of 15 hedge funds in the third quarter, with a total stake value of $63.7 million. Of these funds, Waratah Capital Advisors was the largest stakeholder in the company, holding 3.7 million shares worth $13.5 million.
Nexgen Energy Ltd. (NYSE:NXE), like BHP Group (NYSE:BBL), ConocoPhillips (NYSE:COP), and Exxon Mobil Corporation (NYSE:XOM), is an energy stock rapidly gaining popularity among investor circles this year.
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Disclosure: None. 11 Best Nuclear Energy Stocks To Buy Today is originally published on Insider Monkey.