It’s time to buy and hold long-term uranium stocks.
For one, the supply-demand situation is only getting worse. The Russian uranium ban goes into effect on August 1. And the government of Kazakhstan just increased its extraction tax, which will limit supply growth. Two, with the artificial intelligence boom showing no signs of slowing, uranium could help fuel energy needs.
Plus, as noted by Wells Fargo, after years of flat power growth in the U.S., electricity demand could grow as much as 20% by 2030. Again, because of the AI data center demand.
“AI data centers alone are expected to add about 323 terawatt hours of electricity demand in the U.S. by 2030, according to Wells Fargo. The forecast power demand from AI alone is seven times greater than New York City’s current annual electricity consumption of 48 terawatt hours. Goldman Sachs projects that data centers will represent 8% of total U.S. electricity consumption by the end of the decade,” says CNBC.
It’s a big part of why nuclear energy demand is surging, which will only fuel further upside for some of the top long-term uranium stocks to buy today.
Cameco (CCJ)
Earlier this week, I said “Cameco’s (NYSE:CCJ) recent weakness is a strong buy opportunity. Helping “analysts at Bank of America added Cameco to its US 1 List. With a buy rating, Goldman Sachs raised its price target to $56. And RBC Capital recently said they’d buy on weakness,” I added.
Plus, with supply unlikely to match demand any time soon, the argument for further upside is easy to make. Also, as noted by Cameco Chief Executive Officer Tim Gitzel, market tightness, mine depletion and underinvestment will keep uranium prices high.
While recent earnings were nothing to write home about, analysts at RBC Capital say they would be buyers on weakness. In its most recent quarter, Cameco’s adjusted earnings per share of 13 cents missed expectations of 26 cents. Its net loss of $7 million was also well below the $119 million profit recorded a year ago.
NexGen Energy (NXE)
Earlier this week, I also said that “NexGen Energy (NYSE:NXE) is also a buy on weakness.”
I also noted that if its Rook 1 project sees Canadian approval, it could be one of the biggest uranium mines in the world. According to the company, “The proposed new underground mine and mill development is located in the uranium-rich district of the southwestern area of the Athabasca Basin; located in Saskatchewan – a premier mining jurisdiction.”
In addition, according to NexGen’s latest investor presentation, it expects uranium demand to explode by 127% by 2030, and by 200% by 2040. On top of that, they argue the world could see a 240-million-pound deficit in 2040.
They also noted that the “Growing supply deficit requires over 5 new Rook I sized projects to be found, permitted, financed and constructed over the next 20 years. Current mine supply has never been more fragile.”
Energy Fuels (UUUU)
Oversold at triple-bottom support dating back to early May, Energy Fuels (NYSEAMERICAN:UUUU) is another one of the top long-term uranium stocks to buy. It’s also oversold on RSI, MACD and Williams’ %R, and could easily pop on uranium supply-demand issues. Last trading at $5.60, I’d like to see it retest $6.75 first.
Helping, about 11 UUUU insiders bought stock in early May. That included President and CEO Mark Chalmers, who picked up 16,838 shares worth $98,671; Director Bruce Hansen, who picked up 6,000 shares worth $34,950; and VP of Conventional Operations Logan Shumway, who picked up 4,000 shares worth $23,360.
All after the U.S. Senate approved the Russian uranium ban, which will ban the import to low-enriched uranium from the country.
Investorplace.com contributor Eddie Pan added, “According to Utility Dive, the ban opens up the door for $2.7 billion in authorized funding to support the domestic production of LEU, which benefits uranium miners like UUUU.”
Denison Mines (DNN)
Another one of the top long-term uranium stocks to buy is Denison Mines (NYSEAMERICAN:DNN).
For the first time since March 2023, DNN broke below its 50-day and 100-day moving averages to the downside. However, I strongly believe it’ll bounce back shortly with the uranium supply and demand issue still tight. It’s also technically oversold on RSI, MACD and Williams’ %R. And from its last traded price of $1.88, I’d like to see it initially retest $2.50.
Helping, analysts at Roth MKM recently initiated a buy rating on DNN with a $2.60 price target. The firm believes “the company is well positioned to become a low-cost uranium producer in the coming years and has significant exploration growth potential through its large portfolio of projects,” as noted by Seeking Alpha.
Also, the firm says DNN’s McLean Lake mill could process up to 24 million pounds of uranium each year, which has “significant strategic value for Denison in the medium-to-long term.”
Paladin Energy (PALAF)
Even Paladin (OTCMKTS:PALAF) is a gift at $7.38. Also oversold on RSI, MACD and Williams’ %R, I’d like to see PALAF retest $11 initially. Helping, about six analysts rate it a buy with an average price target of $10.71. Morgan Stanley recently reiterated its buy rating on the stock with a price target of $11.66 a share.
Helping, the company says its acquisition of Fission Uranium could make it the market’s third-largest publicly traded uranium producer. As noted by Bloomberg, “Paladin would churn out 10% of global uranium output after combining production of its Namibian mine with Fission’s Canadian project when completed, Chief Executive Officer Ian Purdy said.
Sprott Uranium Miners ETF (URNJ)
Or, if you want broader exposure to uranium miners, there’s the Sprott Uranium Miners ETF (URNM). With an expense ratio of 0.80%, URNJ is a pure-play junior uranium mining ETF. It tracks the performance of uranium stocks, such as Paladin Energy, Uranium Energy (NYSEAMERICAN:UEC), Denison Mines, and Energy Fuels.
Helping, as I noted earlier this year, “Historical behavior suggests that small and mid-size uranium miners are likely to catch up and outperform in the near future, especially with potential catalysts” such as the current supply-demand issue,” as highlighted by Seeking Alpha.
Technically, the URNJ ETF is an excessively oversold gift at $21.50 a share. It’s also over-extended on RSI, MACD and Williams’ %R.
VanEck Uranium and Nuclear Energy ETF (NLR)
There’s also the VanEck Uranium and Nuclear Energy ETF (NYSEARCA:NLR). With an expense ratio of 0.64%, the NLR ETF tracks stocks involved with mining. It’s also technically oversold at $76.30 – another gift – and over-extended on RSI, MACD and Williams’ %R.
Some of its top holdings include Constellation Energy (NASDAQ:CEG), Cameco, PG&E (NYSE:PCG), Uranium Energy, and NexGen Energy to name a few of the top ones. It should also benefit from the severe supply-demand situation, which will only get tighter with the Russian ban.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.