Is Centrus Energy (LEU) a Misunderstood Stock?

Riverwater Partners, an investment management company, released its “Micro Opportunities Strategy” Q4 2024 investor letter. A copy of the letter can be downloaded here. Although the Micro Opportunities Strategy had impressive absolute returns in the fourth quarter, it fell short of the benchmark, which resulted in a year-over-year underperformance. The quarterly results were primarily driven by stock selection. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

Riverwater Partners Micro Opportunities Strategy highlighted stocks like Centrus Energy Corp. (NYSEMKT:LEU) in the fourth quarter 2024 investor letter. Centrus Energy Corp. (NYSEMKT:LEU) is a nuclear fuel components and services provider for the nuclear power industry. One-month return of Centrus Energy Corp. (NYSEMKT:LEU) was 21.89%, and its shares gained 68.40% of their value over the last 52 weeks. On January 21, 2025, Centrus Energy Corp. (NYSEMKT:LEU) stock closed at $88.53 per share with a market capitalization of $1.452 billion.

Riverwater Partners Micro Opportunities Strategy stated the following regarding Centrus Energy Corp. (NYSEMKT:LEU) in its Q4 2024 investor letter:

“UROY offers a less risky way to capitalize on the upside in uranium prices compared to Centrus Energy Corp. (NYSEMKT:LEU), which we exited during the quarter. While LEU had risen sharply on expectations of winning government contracts, geopolitical risks tied to Russia’s ban on enriched uranium exports posed a significant threat to its core business, which we believe is misunderstood by the market.”

A vast construction site with heavy machinery, materials, and workers, showcasing the company’s global presence.

Centrus Energy Corp. (NYSEMKT:LEU) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held Centrus Energy Corp. (NYSEMKT:LEU) at the end of the third quarter which was 9 in the previous quarter. While we acknowledge the potential of Centrus Energy Corp. (NYSEMKT:LEU) as an investment, 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We previously discussed Centrus Energy Corp. (NYSEMKT:LEU) in another article, where we shared the list of best Uranium stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2024 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.