1. Cameco (NYSE:CCJ)
TTM Net Income: $190 Million
5-Year Net Income CAGR: 11.82%
Number of Hedge Fund Holders: 60
Cameco (NYSE:CCJ) is a leader in uranium production, with a significant presence in Canada’s Athabasca Basin through its Cigar Lake and McArthur River mines. The company’s integrated business model also encompasses uranium refining, conversion, and fuel manufacturing, making it a significant player in the nuclear fuel cycle. Cameco (NYSE:CCJ) is also a critical player in the development of small modular reactors (SMRs).
Cameco (NYSE:CCJ) has a 40% stake in the Inkai deposit in Kazakhstan, the world’s largest uranium deposit, which provides a substantial source of uranium production. The nuclear industry is driven by the increasing global demand for clean and reliable energy, and Cameco (NYSE:CCJ) is well-positioned to capitalize on this trend. The company’s diversified business, strategic partnerships, and expertise in the nuclear fuel cycle make it an attractive player in the market. Government policies to reduce carbon emissions and meet growing electricity needs are expected to drive up uranium prices, benefiting Cameco (NYSE:CCJ), given its significant uranium reserves and production capacity. Aristotle Capital Management stated the following regarding Cameco (NYSE:CCJ) in their 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.”
Cameco (NYSE:CCJ) expects to deliver 32-34 million pounds of uranium in 2024, representing a 1.5% increase from the previous year. The company’s expertise in uranium mining and conversion positions it well to capitalize on the growing demand for nuclear energy. As of June 30, Cameco’s (NYSE:CCJ) stock was held by 60 hedge funds with stakes worth $846.57 million.
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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