7. Cameco Corporation (NYSE:CCJ)
Number of Hedge Fund Investors: 60
Cameco Corporation (NYSE:CCJ) is a leader in uranium production, boasting a significant presence in Canada’s Athabasca Basin through its Cigar Lake and McArthur River mines. The company operates under an integrated business model that includes uranium refining, conversion, and fuel manufacturing. Cameco Corporation (NYSE:CCJ) has established itself as a major player in the nuclear fuel cycle. Additionally, the company is actively involved in the development of small modular reactors (SMRs).
Cameco Corporation (NYSE:CCJ) holds a 40% stake in the Inkai deposit in Kazakhstan, the largest uranium deposit in the world, which serves as a substantial source of uranium production. The nuclear industry is experiencing growth driven by increasing global demand for clean and reliable energy, and Cameco Corporation (NYSE:CCJ) is well-positioned to take advantage of this trend. With its diversified operations, strategic partnerships, and expertise in the nuclear fuel cycle, the company is an attractive player in the market. Government policies aimed at reducing carbon emissions and addressing rising electricity needs are expected to drive up uranium prices, benefiting Cameco Corporation (NYSE:CCJ) due to its significant uranium reserves and production capacity.
Cameco Corporation (NYSE:CCJ) anticipates delivering between 32 and 34 million pounds of uranium in 2024, which represents a 1.5% increase compared to the previous year. The company’s extensive expertise in uranium mining and conversion places it in a strong position to take advantage of the increasing demand for nuclear energy. Aristotle Capital Management highlighted Cameco (NYSE:CCJ) in its Q2 investor letter:
“Cameco Corporation (NYSE:CCJ), one of the world’s largest publicly traded uranium producers, was the top contributor during the period. Support from governments and policymakers for nuclear energy has continued to increase in 2024 as countries realize it can play a crucial role in both promoting energy security and lowering dependence on fossil fuels to meet environmental goals. With higher demand for uranium across the world, Cameco’s production was up more than 25% year-over-year, and its long-term supply contracts have increased (annual commitments now standing at 28 million pounds per year through 2028). We view these fundamental improvements as further proof Cameco is making progress on our catalyst of increasing its uranium volume sold at higher prices, all while lowering production costs through scale and its access to some of the highest-grade ore on the planet. In addition, we believe the company’s continued integration of Westinghouse Electric Company’s market-leading downstream capabilities will allow it to offer a highly competitive nuclear fuel solution. In our opinion, this puts Cameco on track to enjoy higher levels of FREE cash flow and the ability to de-risk its balance sheet as it meets global energy needs.”
