15 Small-Cap Energy Stocks Hedge Funds Are Buying

3. Cameco Corp. (NYSE:CCJ)

Market Capitalization as of April 25: $19.15 billion

Number of Hedge Fund Holders: 65

Cameco Corp. (NYSE:CCJ) provides uranium for the generation of electricity. The company’s Uranium segment explores, mines, purchases, and sells uranium concentrate. The Fuel Services segment refines, converts, and fabricates uranium concentrate. The Westinghouse segment operates as a nuclear reactor technology OEM and provides products/services to commercial utilities and government agencies.

On March 12, Stifel Canada started coverage of Cameco with a Buy rating and a price target of C$90. Stifel is positive on the company due to the rising uranium prices and Cameco’s solid financial performance. Cameco’s revenue increased by over 33% year-over-year to $834.83 million, which exceeded estimates by $68.38 million. The full-year 2024 revenue also shot up 21% due to higher prices. The company’s average realized price rose 17% to $58.34 per pound while its sales volumes grew 5%.

Cameco Corp. (NYSE:CCJ) delivered 33.6 million pounds of uranium at $79.70 per pound last year and expects 36 million pounds in total in 2025. The fuel services segment delivered 12.1 million kgU at an average price of $37.87 per kgU. The company’s long-term contracts stood at ~220 million pounds at the end of 2024, and it already has a large pipeline under discussion.

Aristotle Capital Management, LLC’s International Equity Strategy highlighted the company’s strong performance and stated the following regarding Cameco Corporation (NYSE:CCJ) in its Q4 2024 investor letter:

“Cameco Corporation (NYSE:CCJ), one of the world’s largest uranium producers, was a major contributor during the period. With the continued focus on artificial intelligence and clean energy, the demand for nuclear energy remained robust. Some of the largest companies in the world, such as Amazon, Google and Meta, announced nuclear power agreements in the quarter. Given Cameco’s tier-one assets in reliable jurisdictions, proven operating experience and strong reputation, we believe the company is in a unique position to benefit as various industries and governments pursue clean, reliable and scalable sources of energy. Correspondingly, Cameco increased its production outlook, having already secured commitments that net an average of 29 million pounds per year over the next four years. We believe Cameco’s continued ability to efficiently increase production while securing long-term contracts will lead to sustainably higher levels of normalized FREE cash flow. While its Canada-based mines and Westinghouse unit are executing well, production was recently suspended at Cameco’s Inkai joint venture in Kazakhstan. We believe production will restart soon and note that Cameco’s share of Inkai’s production amounts to less than 10% of total Cameco volumes, a figure that can be offset with increased production at the company’s MacArthur River and Key Lake mines in Canada.”