In this article, we will look at the 7 Best Uranium Stocks To Buy According to Hedge Funds.
Uranium Market Outlook
According to a report by the World Nuclear Association, the uranium market is a complex and cyclical industry, with prices fluctuating based on demand and supply. In recent years, primary production from mines has supplied around 90% of the requirements of power utilities, with the remaining 10% coming from secondary sources such as ex-military material, recycling, and stockpiles. The demand for uranium is driven by the need for fuel to power nuclear reactors. There are currently around 440 reactors worldwide, with a combined capacity of around 390 GWe. These reactors require around 80,000 tonnes of uranium oxide concentrate each year, which contains around 67,500 tonnes of uranium.
The uranium supply comes from various sources, including mines, stockpiles, and secondary sources, such as recycled uranium and plutonium. In 2022, mines supplied around 58,201 tonnes of uranium oxide concentrate containing around 49,355 tU, around 74% of the utilities’ annual requirements. Secondary sources of uranium include recycled uranium and plutonium from used fuel, re-enriched depleted uranium tails, ex-military weapons-grade uranium, and civil stockpiles. These sources, such as mixed oxide (MOX) fuel, can be converted into usable fuel.
The demand for Uranium is expected to grow over the next decade. The World Nuclear Association’s Nuclear Fuel Report indicates a 28% increase in uranium demand over 2023-2033 and a 51% increase in uranium demand for 2031-2040. However, the uranium market faces several challenges, including the need for increased investment in new mines and infrastructure, as well as similar policies that give preferential to subsidized wind and solar sources. There are growth opportunities, particularly in nuclear energy, which is expected to play a key role in reducing carbon emissions and meeting increasing global energy demands.
Big Tech Investments in Nuclear Energy to Drive Sector Growth
In an interview on September 24 with CNBC, Amir Adnani, CEO of Uranium Energy, said that he is highly optimistic about the future of uranium investing. He believes that the uranium market is finally emerging from an 11-year bear market and is experiencing a renaissance. This newfound enthusiasm for uranium is driven by the growing recognition that nuclear power is crucial in the global effort to achieve carbon neutrality by 2050. As the world becomes increasingly aware of the need to reduce its reliance on fossil fuels and transition to cleaner forms of energy, nuclear power is being rediscovered as a vital part of the solution.
Adnani notes that public opinion polls are now at an all-time high in support of nuclear power, indicating a significant shift in the public’s perception of this form of energy. Furthermore, big tech companies are beginning to take notice of the potential of nuclear energy and are starting to partner with nuclear energy companies to invest in new infrastructure. This influx of capital and expertise is expected to have a profound impact on the industry, driving innovation and growth in the sector. The demand for nuclear-generated electricity is increasing exponentially, driven by the development of data centers and cloud computing. This surge in demand is causing U.S. utilities to extend the life of reactors and bring back previously retired reactors, which in turn is driving up the market for uranium.
However, Adnani also acknowledges concerns about the potential for big tech companies to drive up prices for households using power. This is a valid concern, as the increasing demand for nuclear-generated electricity could potentially lead to a supply shortage, driving up prices for consumers. Nevertheless, Adnani believes that this is a manageable risk and that the benefits of investing in uranium far outweigh the potential drawbacks. He notes that the utilities need to invest upward of $50 billion to keep up with the growing demand for nuclear-generated electricity, which presents a significant opportunity for investors.
The uranium market is expected to experience significant growth over the next decade due to the growing demand for nuclear energy and an increasing need for low-carbon energy sources. The uranium market is poised to play a critical role in meeting global energy demands. With that in context, let’s take a look at the 7 best uranium stocks to buy according to hedge funds.
An aerial shot of the uranium mines, demonstrating the company’s vast mineral resources.
Our Methodology
To compile our list of the 7 best uranium stocks to buy according to hedge funds, we used the Finviz and Yahoo stock screeners to find the 9 largest Uranium companies. We then narrowed our choices to 7 stocks according to their hedge fund sentiment, which was taken from our database of 912 elite hedge funds as of Q2 of 2024. The list is sorted in ascending order of their hedge fund sentiment, as of the second quarter.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
7 Best Uranium Stocks To Buy According to Hedge Funds
7. Centrus Energy (NYSE:LEU)
Number of Hedge Fund Investors: 9
Centrus Energy (NYSE:LEU) is a leading nuclear fuel supplier that provides critical fuel for nuclear power plants and is developing the next generation of centrifuge technologies. The company produces enriched uranium for both commercial and government applications. Centrus Energy (NYSE:LEU) is the only company in the United States licensed to produce 20% enriched uranium.
The US government has set aside $3.4 billion to support the production of nuclear fuel in the United States. Centrus Energy (NYSE:LEU), being a US company, is competing for federal funding under a series of Requests for Proposals (RFPs) issued by the U.S. Department of Energy. On September 24, management highlighted the importance of American-made technology and jobs, which aligns with the interests of policymakers of Capitol Hill. The company’s CEO, Amir Vexler, made a strong case for investing in American enrichment technology, which suggests that Centrus Energy (NYSE:LEU) may secure funding.
On September 11, Centrus Energy (NYSE:LEU), signed a contingent supply commitment with Korea Hydro & Nuclear Power (KHNP) to support the construction of new uranium enrichment capacity at the company’s Centrifuge Plant in Piketon, Ohio. This commitment, which is valued at $1.8 billion, covers a decade of deliveries of Low-Enriched Uranium (LEU) to help fuel Korea’s large number of reactors. Centrus Energy (NYSE:LEU) has already secured $1.8 billion in contingent sales commitments from KHNP to support the deployment of new capacity.
Centrus Energy’s (NYSE:LEU) Piketon site in Ohio has the capacity to produce up to 5 million SWU of enriched uranium, which is a significant increase from the company’s current production levels. Centrus Energy (NYSE:LEU) plans to scale up its production facility on a modular basis, enabling it to meet the growing demand for its products.
According to the International Energy Agency (IEA), global nuclear electricity generation is forecast to hit an all-time high in 2025, with nuclear energy combined with renewable energy predicted to overtake coal-fired generation for the first time in 2026. This growing demand for nuclear energy will drive the need for a reliable domestic supply of enriched uranium. Centrus Energy (NYSE:LEU) is a compelling investment opportunity driven by growing demand for nuclear energy and government support. In the second quarter, the company’s stock was held by 9 hedge funds with stakes worth $26.60 million.
6. Energy Fuels (NYSE:UUUU)
Number of Hedge Fund Investors: 11
Energy Fuels (NYSE:UUUU) is a Canadian company that is engaged in the extraction, recovery, and processing of uranium, vanadium, and rare earth elements (REEs). The company has a diverse portfolio of assets in the United States including the White Mesa Mill in Utah, the Nichols Ranch ISR Project in Wyoming, and the La Sal Complex in Utah.
Energy Fuels’ (NYSE:UUUU) uranium segment represents 88% of its revenue, and it has a strong pipeline of projects, including the Pinyon Plain, La Sal, and Pandora mines, which are expected to ramp up production by the end of this year. Additionally, the company is making progress with the permits for the Whirlwind and Nichols Ranch mines, which could increase its uranium production to over two million pounds per year by 2025. The recent geopolitical tailwinds in the US, including the approval of the Prohibiting Russian Uranium Imports Act, are expected to drive up uranium prices, making Energy Fuels well-positioned to capitalize on this trend.
The company’s REE segment is also expected to drive growth with the completion of phase 2 and phase 3 expansion plans at the White Mesa Mill. The phase 2 expansion is expected to increase the company’s NdPr production to 4,000-6,000 tonnes per year, a 29x improvement from the current production levels. The company has no debt and healthy liquidity, including $146.7 million in marketable securities and $30.4 million in inventories, which provides a solid foundation for the company’s growth plans.
The company is well-positioned to capitalize on the growing demand for uranium and REEs, driven by the increasing adoption of electric vehicles and renewable energy technologies. In the second quarter, Energy Fuels’ (NYSE:UUUU) stock was held by 11 hedge funds with stakes worth $25.84 million. Bridgewater Associates is the largest shareholder in the company with a stake worth $9.22 million as of June 30.
5. Ur-Energy (NYSE:URG)
Number of Hedge Fund Investors: 13
Ur-Energy (NYSE:URG) is a low-cost operating uranium mining company that identifies, acquires, explores, develops, and operates uranium projects. The company has established itself as a key player in the uranium industry, with a focus on in-situ recovery (ISR) uranium mining. The company’s Lost Creek facility in south-central Wyoming has produced approximately 2.8 million pounds of U3O8 since its commencement of operations in 2013.
Ur-Energy (NYSE:URG) is expanding its operations with the development of two uranium projects, Lost Creek and Shirley Basin. On September 18, the company announced that its Lost Creek project is currently in the ramp-up phase, with five header houses coming online in 2024. The most recent header house, HH2-10, came online in mid-August, and HH2-11 is expected to come online this month. The average production solution headgrade in August was 67.1 mg/L, which is a positive indicator of the project’s performance. The company has also made five shipments to the conversion facility this year, with the most recent shipment arriving on September 11.
Despite some challenges, the Lost Creek project is making progress. The company has 15 drill rigs on site, with additional rigs pending, and plans to redirect some of these rigs to exploration projects within the Great Divide Basin to replace mined pounds with new uranium resources.
The Shirley Basin project, on the other hand, is still in the development phase. The installation of monitor wells for the first mine unit is on schedule. The company expects to finalize well completions in the coming days and has three drill rigs working at Shirley Basin, which will be redeployed to Lost Creek when the completion work concludes. The company plans to collect baseline water quality and perform hydrologic aquifer tests this fall and expects construction at Shirley Basin to be complete in late 2025.
With a growing presence in the uranium market and ongoing projects, Ur-Energy (NYSE:URG) is well-positioned to capitalize on the increasing demand for uranium. In the second quarter, the company’s stock was held by 13 hedge funds with stakes worth $51.49 million. Azarias Capital Management is the largest shareholder in the company, with a stake worth $22.91 million as of June 30.
4. Denison Mines (NYSE:DNN)
Number of Hedge Fund Investors: 21
Denison Mines (NYSE:DNN) is focused on uranium exploration, development, and production, with its primary operations in the Athabasca Basin, Canada, one of the richest uranium-producing regions globally. The company is advancing the development of its flagship Wheeler River Project.
Denison Mines’ (NYSE:DNN) main asset is the Wheeler River Project, which includes Phoenix, an ISR project currently in permitting, and Gryphon, a conventional mine that is currently under development. The company also owns 22.5% of McClean Lake, which has a mill with an annual licensed production capacity of 24Mlbs of uranium, and 69% of the Waterbury Lake project, a small-scale ISR uranium mining project in the Athabasca Basin.
The company’s innovative in-situ recovery (ISR) mining techniques are designed to reduce environmental impact while ensuring efficient uranium extraction. The In Situ Leach (ISL) method is a type of uranium mining that involves dissolving the uranium minerals in place without physically removing the ore from the ground. A solution is injected into the underground orebody, dissolving the uranium minerals and releasing them into the solution. The solution is then pumped back to the surface, where the uranium is recovered using a conventional uranium processing plant. This method has several advantages, including low surface disturbance and no tailings or waste rock. It is also often considered a more cost-effective method of uranium mining.
Denison Mines’ (NYSE:DNN) high internal rate of return for Phoenix and its well-capitalized position make it a compelling investment opportunity for Investors who are interested in the uranium industry. In the second quarter, the company’s stock was held by 21 hedge funds with stakes worth $95.36 million. Point72 Asset Management is the largest shareholder in the company with a stake worth $20.17 million as of June 30.
3. Uranium Energy (NYSE:UEC)
Number of Hedge Fund Investors: 28
Uranium Energy (NYSE:UEC) is a US-based uranium mining company with projects focused on in-situ recovery (ISR) mining in Wyoming and Texas. Uranium Energy (NYSE:UEC) has been expanding its portfolio through acquisitions of key uranium assets and is strategically positioned to benefit from increasing domestic uranium demand, especially in light of national security concerns regarding uranium supply.
Uranium Energy (NYSE:UEC) employs a cutting-edge mining technique called In-Situ Recovery (ISR) at several of its uranium projects, including Palangana, Burke Hollow, Goliad, and Reno Creek. This low-cost and environmentally friendly method involves injecting oxygenated groundwater into uranium ore bodies to dissolve the uranium. The resulting uranium-rich solution is then extracted to the surface and concentrated onto resin beads, which are subsequently transported to a processing plant for further concentration. Uranium Energy’s (NYSE:UEC) ISR technology enables it to produce uranium in a cost-effective and environmentally sustainable manner.
The demand for uranium is linked to the explosion of artificial intelligence and data centre development. Data centres, which power the digital backbone of AI applications, consume vast amounts of electricity. This demand, combined with the increasing prevalence of electric vehicles and industrial growth, has put immense pressure on the U.S. electricity grid. Nuclear energy, the largest source of carbon-free power in the U.S., provides about 19% of the nation’s electricity and Uranium Energy (NYSE:UEC) is well-positioned to meet this growing demand.
Uranium Energy (NYSE:UEC) is debt-free, which makes it a compelling investment opportunity, as the demand for uranium is set to skyrocket in the coming years. With the surge in AI technologies and companies such as Microsoft, Amazon, and Oracle investing in AI, and data centers, nuclear energy will play a critical role in powering the vast data centers that drive AI. In the second quarter, the company’s stock was held by 28 hedge funds with stakes worth $148.80 million. Driehaus Capital is the largest shareholder in the company with a stake worth $54.97 million as of June 30.
2. NexGen Energy (NYSE:NXE)
Number of Hedge Fund Investors: 33
NexGen Energy (NYSE:NXE) is a Canadian uranium exploration and development company, primarily focused on the Athabasca Basin in Saskatchewan. Its flagship Rook I project hosts the Arrow Deposit is one of the highest-grade uranium deposits in the world. NexGen Energy’s (NYSE:NXE) advanced-stage projects and significant high-grade uranium reserves position it as a key player in the uranium market, with the potential to become a major uranium producer in the near future.
NexGen Energy’s (NYSE:NXE) main project Rook I is centred around a large uranium deposit discovered in 2014 known as the Arrow Deposit, spans over 35,065 hectares and has 32 minerals. The high-grade uranium found at the Arrow Deposit is the type of uranium used in nuclear power plants to produce energy.
The recent legislation signed by Joe Biden, known as the Prohibiting Russian Uranium Imports Act, will ban the import of Russian unirradiated low-enriched uranium (LEU) to the United States. The ban will begin 90 days post-signature, with phased reductions in allowable imports leading to a complete ban by January 1, 2028. This new legislation will gradually increase the demand for uranium from allied countries, such as Canada, in the next 4 years. In Q1, NexGen Energy (NYSE:NXE) reported a 32% year-over-year increase in cash and liquid assets, primarily driven by financing activities.
The upcoming decision from the federal commission hearing can be a significant catalyst for the share price and NexGen Energy (NYSE:NXE) can have a significant upside in the next 2-4 years. In the second quarter, the company’s stock was held by 33 hedge funds with stakes worth $275.91 million. Moore Global Investments is the largest shareholder in the company with a stake worth $33.30 million as of June 30.
1. Cameco (NYSE:CCJ)
Number of Hedge Fund Investors: 60
Cameco (NYSE:CCJ) is one of the largest uranium producers globally, with key operations in Canada’s Athabasca Basin, including the Cigar Lake and McArthur River mines. Cameco (NYSE:CCJ) also provides uranium refining, conversion, and fuel manufacturing services, making it a vertically integrated player in the nuclear fuel cycle.
Cameco (NYSE:CCJ) is a significant player in the development of small modular reactors (SMRs) and the expansion of its uranium mining and processing operations. The company owns 40% ownership stake in the Inkai deposit in Kazakhstan, which is the world’s leading deposit of uranium, and provides a significant source for uranium production.
The company’s recent acquisition of a 49% stake in Westinghouse, a global supplier to the commercial power industry, has further strengthened its position in the market. This strategic move has not only expanded Cameco’s (NYSE:CCJ) service offerings but also provided a platform for the company to tap into the growing demand for nuclear energy. The company’s 49% stake in Westinghouse is expected to generate significant revenue and earnings growth in the coming years.
The nuclear industry is is driven by increasing global demand for clean and reliable energy. Cameco (NYSE:CCJ) is well-positioned to capitalize on this trend, due to its diversified business model, strategic partnerships, and expertise in the nuclear fuel cycle. The increasing demand for nuclear energy, driven by government policies to reduce carbon emissions and meet growing electricity needs, is expected to drive up uranium prices.
Cameco (NYSE:CCJ) is likely to benefit from this trend, given its significant uranium reserves and production capacity. Cameco (NYSE:CCJ) expects to deliver 32-34 million pounds of uranium in 2024, representing a 1.5% increase from the previous year. Additionally, the company’s expertise in uranium mining and conversion positions it well to capitalize on the growing demand for nuclear energy. In the second quarter, the company’s stock was held by 60 hedge funds with stakes worth $846.57 million. Driehaus Capital is the largest shareholder in the company with a stake worth $192.62 million as of June 30.
While we acknowledge the potential of Cameco (NYSE:CCJ) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CCJ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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