Meridian Funds, managed by ArrowMark Partners, released its “Meridian Contrarian Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -6.16% (net) compared to a -4.78% return for the Russell 2500 Index. Furthermore, the fund underperformed its secondary benchmark, the Russell 2500 Value Index, which returned -3.66% during the same period. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Meridian Contrarian Fund highlighted stocks like Cameco Corporation (NYSE:CCJ) in the third quarter 2023 investor letter. Headquartered in Saskatoon, Canada, Cameco Corporation (NYSE:CCJ) is a uranium producer that operates through Uranium and Fuel Services segments. On November 29, 2023, Cameco Corporation (NYSE:CCJ) stock closed at $44.19 per share. One-month return of Cameco Corporation (NYSE:CCJ) was 7.65%, and its shares gained 81.26% of their value over the last 52 weeks. Cameco Corporation (NYSE:CCJ) has a market capitalization of $19.213 billion.
Meridian Contrarian Fund made the following comment about Cameco Corporation (NYSE:CCJ) in its Q3 2023 investor letter:
“Cameco Corporation (NYSE:CCJ) is a global leader in the mining, fabricating, and refining of uranium products for nuclear power plants around the world. We believe Cameco has the lowest costs, highest grade reserves, and most favorably located mines. Cameco was out of favor with investors for over a decade following the 2011 Fukushima nuclear disaster which halted growth of new nuclear development and caused several countries to shut down nuclear power production. With lower demand, uranium prices fell precipitously and stagnated. We invested in Cameco in 2020 with the thesis that global production had fallen to a level below global demand which should eventually cause uranium prices to rise, benefiting Cameco’s earnings.
We also believed that there was upside optionality in the form of potentially resurgent interest in nuclear power. Several important factors support our belief. Nuclear power is clean with zero carbon emissions or other airborne pollutants, and highly reliable as nuclear plants operate 24/7 for several decades Past performance is no guarantee of future results. Investors should consider the investment objective and policies, risk considerations, charges and ongoing expenses of an investment carefully before investing. The prospectus contains this and other information relevant to an investment in the fund. Please read the prospectus carefully before you invest or send money. To obtain a prospectus, please contact your investment representative or Destra Capital Investments LLC at 877.855.3434 or access the website at www.arrowmarkpartners.com/meridian. Not FDIC-Insured, Not Bank Guaranteed, May Lose Value 437 57 100 300 914 Number of Nuclear Plants Expected to Double Current Under Construction Planned Proposed Current + Proposed 180 218 350 150 160 180 Current 2030 2040 Current and Projected Supply/Demand Imbalance (Uranium Mlbs) Demand Supply decades. Modern nuclear plants are far more resistant to natural disasters than the Fukushima plant which was built in the 1970s. Small modular reactors (SMRs) are a new format of plant that can be built more cheaply and quickly than traditional plants and are also safer. Modern nuclear waste disposal technology is safe and highly effective. Due to these factors, many countries are extending the lives of their nuclear plants rather than shutting them down, and there are at least 57 new nuclear plants under construction, 100+ planned, and more than 300 proposed compared to the current installed base of 437. Based on this, projected uranium demand is expected to significantly increase while supply will continue to be constrained. This supply/demand imbalance should be very positive for uranium prices, in our view. During the quarter, the stock performed well as uranium spot prices increased by 25%. As contracted prices catch up to spot pricing, we project that Cameco could generate significant earnings and free cash flow gains. We believe Cameco is attractive at current prices. There could also be further upside to earnings from Cameco’s investment in the nuclear division of Westinghouse, which should benefit from new development activity. As such, we maintained a large position in Cameco stock.“
A mining worker in a hard hat and coveralls hammering away at the uranium rich walls of the mine.
Cameco Corporation (NYSE:CCJ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Cameco Corporation (NYSE:CCJ) at the end of third quarter which was 54 in the previous quarter.
We previously discussed Cameco Corporation (NYSE:CCJ) in another article and shared a list of stocks that Stan Druckenmiller is still very bullish on. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
