Five Uranium Stocks to Buy According to Hedge Funds

With a surge in solar and wind powered energy, one would expect that demand for nuclear reactors to produce electricity. Still wary of everything nuclear following the Fukushima disaster, countries like Germany and Japan have stepped up efforts to reduce their dependence on nuclear-powered energy. This does not apply to China and India, whose appetite for nuclear reactors has not faded. With the price of Uranium far from the 2007 high and showing signs of a bottom, we have decided to take a look at the most popular mining stocks that are in the uranium business and see how the hedge funds have positioned themselves in this market.

The smart money sentiment is an important metric that can be used to assess the long-term profitability of a stock. While there are thousands of stocks trading daily on the market, taking a look at what hedge funds think about certain companies can narrow down the search significantly. At Insider Monkey, we track more than 700 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).

The hedge fund sentiment towards Cameco Corporation (USA) (NYSE:CCJ) has slightly improved over the fourth quarter, with the number of funds with long positions increasing to 24 from 21. Cliff Asness’ AQR Capital Management is bullish on this stock, having increased its stake by 140% over the quarter to 2.85 million shares valued at a little over $35 million. Steven Cohen of Point72 Asset Management is also optimistic about the prospects of the company, having initiated a new position during the quarter and having amassed a total of 3.2 million shares. The management of Cameco Corporation (USA) (NYSE:CCJ) believes the price of uranium is set for a rebound and has stepped up efforts to increase production and to develop new mines in Canada and Australia once it becomes worthwhile. For the 2015 fourth quarter, Cameco Corporation (USA) (NYSE:CCJ) reported a loss of $7.5 million, having been hurt by higher impairment charges. When adjusted for one time costs, the company reported earnings of $0.38 per share on $730.6 million in revenues.

The popularity of AngloGold Ashanti Limited (ADR) (NYSE:AU) among elite hedge funds has increased during the previous quarter, as the number of hedge funds bullish on the stock appreciated to 19 at the end of December, from 15 at the end of September. Together, these funds have control over roughly 11% of the company’s common stock. John Paulson‘s Paulson & Co holds the largest stake in AngloGold Ashanti Limited (ADR) (NYSE:AU) among the funds tracked by Insider Monkey, having reported ownership of 22.9 million shares, down by 9% over the quarter. John Burbank, on the other hand, chose to up his interest, boosting his stake by 136% to amass 12.7 million shares. The South African company is mainly focused on its gold mining business and has posted a profit of $0.16 per share for the fourth quarter, beating analysts’ expectations of $0.05 per share. The management of AngloGold Ashanti Limited (ADR) (NYSE:AU) has recently increased efforts to reduce the debt load and improve margins, having reported a 30% reduction in its net debt for 2015.

Head to the next page to find out more about three other companies engaged in the uranium business.

BHP Billiton Limited (ADR) (NYSE:BHP) has received a boost of confidence from the hedge fund community, as the number of long positions reported by top funds at the end of December rose to 14, from just 4 a quarter before. Simon Sadler, the manager of Segantii Capital, is betting big on BHP Billiton Limited (ADR) (NYSE:BHP), having invested nearly 18% of his capital in this stock. Segantii Capital reportedly holds 2.8 million shares worth approximately $73.2 million. Dmitry Balyasny also believes the stock has great upside potential, having initiated a position during the quarter, amassing exactly 500,000 shares valued at $12.9 million. According to a recent report by The Wall Street Journal, BHP CEO Andrew Mackenzie is hungry for acquisitions, as the world’s largest coal miner by market cap is looking to expand into petroleum and copper business. BHP Billiton Limited (ADR) (NYSE:BHP) expects commodities’ prices to stay at the newly reached lows for a long time and is looking for assets that will have an immediate impact on the bottom line.

As opposed to most of its peers, Rio Tinto plc (ADR) (NYSE:RIO) fell out of favor with hedge funds during the fourth quarter. At the end of 2015, 16 of the funds followed by Insider Monkey reported a stake in the British mining company, down from 19 at the end of the third quarter. The company has a market cap of roughly $53 billion and pays an annual dividend of $2.14 per share, providing investors with a yield of 7.15%. Israel Englander‘s Millennium Management stepped up its interest in Rio Tinto plc (ADR) (NYSE:RIO), having increased its investment by 75% during the quarter. In its latest 13F filing, Millennium Management indicated ownership of 1.35 million shares valued at $39.4 million. Ray Dalio’s Bridgewater Associates also likes Rio Tinto plc (ADR) (NYSE:RIO) and has boosted its holding by 23% to 374,900 shares held at the end of 2015.

Hedge fund sentiment towards Uranium Energy Corp. (NYSEMKT:UEC) did not change significantly during the quarter, with the number of long positions inching up to four by the end of December, from three a quarter earlier. Jim Simons‘ Renaissance Technologies reported a new stake in the company that amounts to 483,510 shares. Billionaire Ken Griffin‘s Citadel Investment Group is also optimistic about the prospects of the company, having increased its holding by 78% over the quarter to 113,560 shares. For the fourth quarter, Uranium Energy Corp. (NYSEMKT:UEC) reported a loss of $4.8 million or $0.05 per share. The Canadian uranium company has also raised $10.5 million in a recent offering, planning to use the money for general corporate and working capital purposes.

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