Commodities & Metals

Why Uranium Stocks Have Been Sinking

In late September, we took a look at five uranium-mining stocks just as shares were peaking. About a month later, the stocks peaked again, before sinking by around a third as of Tuesday’s close.

Uranium prices dipped from around $50 a pound in mid-September to around $38 a pound by early October. Uranium traded at around $46.50 Thursday morning, but the recovery in the commodity price has not trickled down to the miners.

Since our last look at uranium miners, the Sprott Physical Uranium Trust (SRUUF) has increased its holdings of the metal from 28 million pounds to more than 41 million pounds. Since its initial public offering in late July, this over-the-counter-traded fund has added about 22% to its share price.

If the price of uranium is rising and there appears to be one principal buyer, the market may no longer be driving the price.

Here’s a look at how the five uranium miners have performed since a trough in late September.

Saskatchewan-based Cameco Corp. (NYSE: CCJ) watched its share price rise by almost 35% in early November, before sliding to a rise of around 9%. Over the past year, the stock is up about 130%, but most of those gains came in the first half of 2021. The median price target on the stock is around $32, implying a potential gain of 40% to the recent price of $22.85. The stock’s 52-week range is $10.06 to $28.49.

NextGen Energy Ltd. (NYSEAMERICAN: NXE) is a Vancouver-based uranium miner that has seen its share price soar by more than 150% over the past 12 months. Since early November, however, the shares have lost almost 29% of their value. The stock’s median price target is C$10.00, implying a potential gain of 69% to a trading price of around C$5.90. The stock’s 52-week range is $1.86 to $6.50

Since late September, shares of Denison Mines Corp. (NYSEAMERICAN: DNN) have added about 10% to their share price. Over the past 12 months, however, the stock peaked in early November with a gain of more than 450%. Since then the stock is down about 27% and its gain over the past 12 months has been pared to a still-respectable 300%. At a share price of around C$1.90, the implied gain based on a median price target of C$2.82 is 48%. The stock’s 52-week range is $0.40 to $2.14.

Over the past year, shares of Corpus Christi-based Uranium Energy Corp. (NYSEAMERICAN: UEC) peaked in early November with a gain of about 470%. Since then, the stock has dropped by about a third, and for the 12-month period, the share price increase has been pared to around 245%. At a share price of around $5.50, the implied upside based on a median price target of $6.40 is 25%. The stock’s 52-week range is $1.09 to $5.79.

For Colorado-based Energy Fuels Inc. (NYSEAMERICAN: UUUU), the previous 12-months saw the stock hit a peak gain of more than 450% in early November. Since then, the stock has dropped more than 20%, and the 12-month gain has been cut to around 330%. Even so, the stock trades slightly above its median price target of $8.50. The stock’s 52-week range is $2.19 to $11.39.