Nuclear Energy Is Safer Than Other Forms Of Energy.
In this blog post, I share my thesis on why I believe investing in Uranium stocks is a good idea for the patient resource investor.
For example, compared to nuclear energy, the burning of fossil fuels such as coal and oil was responsible for 8.7m deaths globally in 2018, (Source: The Guardian), and many millions more serious and minor illnesses. In China, more than 650,000 people die prematurely p.a. as a result of coal-related air pollution.
The facts are simply mind-blowing statistics:
Deaths By Form Of Energy Per TWh (Terra Watt Hours)
On the one hand, people idly live next to coal plants for decades (even the dirtiest brown coal plants!), and believe this is okay. On the other hand, they object to nuclear energy that has killed less than 5,000 people in its entire history! The transition to de-carbonizing the world will, so I believe, usher in a new era. An era in which the reputation of nuclear energy, and with it, the concept of investing in Uranium stocks, is perceived.
I am by no means an expert in this space, just a DIY investor trying to understand how things work. And I believe we are witnessing an amazing opportunity. An amazing wealth-generation opportunity as we are still extremely early, and the wide public does not even look at the space.
Top 10 Reasons Why Investing In Uranium Stocks Makes Sense
- The world still depends on coal, killing millions a year (!), and harming our children – this needs to change.
- At current price levels, basically, 90% of all Uranium mining companies can not make a profit – either the price goes up, or the lights go out.
- Renewable energy is weather-dependant, AND, renewables like hydro, wind, and solar, require insane amounts of resources such as concrete, lithium, silicone, or silver, requiring environmentally unfriendly mining operations (hence renewable energy is not as clean as people often claim it is). Therefore, nuclear energy is essentially the cleanest form of energy there is. Impressive fact: One single coal plant generates as much waste by volume in one hour as a nuclear power plant in its entire history
- We are facing a crazy geopolitical situation: The U.S. only produces 1% of its annual Uranium need; we can already see it now, but I believe there will be a stampede and total scramble for natural resources, in particular Uranium, as it represents the most effective form of baseload power
- I have the ‘romantic’ or philosophical point of view that any ‘advanced civilization’ should master its most energy-potent raw material
- While being on the topic of ‘romantic’ – if we ever want to become a multi-planetary civilization, we absolutely need Uranium to power the spaceship and rockets to get us there. Just this point alone is important enough to keep on using and mastering this so-potent raw material!
- Bill Gates invested 750 Mio USD in a micro-reactor startup, creating ultra-safe, geographically independent nuclear power plants. Others like Elon Musk also started talking about investing in Uranium stocks!
- In the future, we will surely not have fewer energy needs (think 5G, electric cars, automized robots, cloud computing, AI, server farms, .. there will be a gigantic need for (baseload) energy.
- Just 450 reactors globally power 15% of the world’s energy need (in the U.S., nuclear power plants provide 20% of the baseload power, in France 70%!)
- The World Nuclear Supply Chain Report: Outlook 2040 projects another 300 new reactors will come online over the next 20 years, while 150 are closing, with associated CAPEX of nearly $1 Trillion – $1.7T USD.. this represents an approximate net gain of 135 reactors (!)
This video showing Michael Shellenberger’s viral YouTube video on TED started my journey a few years back.
How To Go About Investing In Uranium Stocks?
After watching the video back in 2018, I didn’t make any investment right away but started to pay more attention to it. Since then, I spent a lot of time researching space. You can check out my entire Uranium portfolio on my Thematic Portfolio page.
Uranium to SPY 500 Ratio
Currently, the prices of the Global X Uranium ETF (URA), one of the leading Uranium miner ETFs compared to the S&P 500 are still incredibly depressed (compare it to 2011!). The thesis here is it shall return to the norm.
Once it breaks above the thin orange line, things might turn very quickly.
updated 2023/09/19, search for “AMEX:URA/SP:SPX” to re-create this chart on Tradingview.com
Now, you can either build up your portfolio of good Uranium stocks or keep things simple and buy my recommended Uranium ETF, called Sprott Uranium Miners Fund (URNM), making investing in Uranium stocks simple!
As for my favorite single Uranium stocks, I surely would go with the 800-pound gorilla, Cameco (CCJ). Check out my full Uranium portfolio on my thematic portfolio page.
As mentioned before, bring a minimum of 3 to 5 years for this investment thesis to play out!
📘 Read Also
- The best car stocks with dividends
- Why I invest in commodities – 15 stock ideas
- How to build a portfolio of gold mining companies
- The best residential REIT in the U.S.
- The 3 best Austrian dividend stocks
How to invest in Uranium stocks?
How to value Uranium stocks?
One big aspect is the price of Uranium. With increasing Uranium prices, the miners subsequently can sell the Uranium they mine for a higher price. The long-term outlook for Uranium is very positive, as the trend towards electrification is strong, requiring the world to produce more and more clean energy.
What are the best NYSE or ARCA Uranium stocks?
URANIUM ENERGY CORP (UEC)
URANIUM ROYALTY CORP (UROY)
SPROTT URANIUM MINERS ETF (URNM)
VANECK URANIUM + NUCLEAR ENERGY ETF (NLR)
What are the best Uranium ETFs?
Should I invest in Uranium stocks?
Uranium stocks can be extremely volatile, hence the right portfolio construction and right allocation to this asset are of great importance. Some advisors recommend putting no more than 1%, or maybe 5% of your liquid net worth in the Uranium sector.
What are the best Uranium stocks to buy?
2 – Energy Fuels (UUUU)
3 – Denison Mines (DNN)
4 – Nexgen Energy (NXE)
5 – Encore Energy (ENCUF)
6 – UEC (UEC)
7 – Global Atomic (GLATF)
8 – Uranium Royalty Corp. (UROY)
9 – Ur-Energy (URG)
10 – Labrador Uranium (LURAF)