- The bullish thesis for uranium is strong; growing demand coming from Japanese restarts and developing Asia, alongside production cuts.
- However, uranium prices are low, so there must be a bearish thesis out there too.
- I put Cameco, Kazatomprom, Uranium Participation Corp, Azarga and NexGen Energy into a risk and reward investing perspective.
Uranium prices have been subdued for more than a decade now. However, there are many uranium bulls calling for the perfect storm in the sector due to production cuts and expected demand growth.
I did a bit of preliminary research into the sector to see what is really going on and found lots of contradictory info. This led me to make 3 videos on uranium. The first describing the uranium bullish thesis. The second countering the bullish thesis with a bearish thesis and consequently, in the third video, analyzing 5 stocks from the sector to get a perspective what is the actual risk and reward when it comes to investing in Uranium.
Investing usually boils down to buying investments with positive asymmetric risk and reward. So, it is important to pair the potential risks and rewards to an actual stock price.
The bullish thesis video content:
0:47 Uranium price
2:18 Production cuts and demand growth
3:18 US procurement quota of 25%
3:35 Uranium growth story
The bearish thesis video content:
0:30 Conservative energy growth estimates
1:44 Ageing reactors
3:39 NexGen’s project and production cuts
5:26 At the mercy of the Kazakhstani Government
5:47 Cost curve
Discussing 5 uranium stocks:
0:50 Cameco (CCJ)
4:51 NexGen Energy (NXE)
6:46 Azarga (AZZUF)
8:00 Uranium Participation Corp (URPTF)
9:08 Investment thesis