This week has seen investors staking significant bets that nuclear power is poised to be a key element in company divestment from fossil fuels. It hasn’t taken long for this trend to affect stock markets. According to the Financial Times, the prices of raw or yellow cake uranium have risen to the highest levels we have seen since 2014. For any company whose holdings include uranium mining, this means a significant spike in prices. Cameco Corporation (NYSE:CCJ) has enjoyed the ride, as have any shareholders with CCJ stock.
CCJ and Others Are Winning This Week
Cameco is having a good a week as one might expect from the world’s biggest uranium mining company during a significant price boom. As of this writing, shares are up 6.45% on the day and 15.68% on the week. CCJ stock saw some significant declines in August but before the month was over, they had recovered and were back to climbing steadily, rising more than 40% overall.
Many of Cameco’s competitors have been enjoying the ride as well. Energy Fuels (NYSEMKT:UUUU), Uranium Energy Corporation (NYSEMKT:UEC) and Denison Mines (NYSEMKT:DNN), all companies who deal at least partially in uranium mining, are up 8.13%, 10.69% and 13.57% for the day as of this writing.
These spikes are likely due to the recent actions of The Sprott Physical Uranium Trust Fund (OTCMKTS:SRUUF), a Toronto-listed exchange traded fund (ETF) which has increased its uranium holdings significantly, acquiring over 240 million pounds of it in a clear attempt to corner the global market.
What It Means
This demand for uranium that large-scale investors were quick to catch on to isn’t going away. It’s likely only going to get fueled even further as Sprott continues its mission, one that similar funds are likely to take note of and to follow.
The transition way from fossil fuels that has spiked this recent trend was a long time in the making. Since the recent uptick in interest in both renewable energy and electric vehicles has become increasingly apartment, it is little surprise that elements such as uranium would be quick to follow.
We’ve seen the demand for lithium increase as electric vehicle producers expand their battery manufacturing operations. The demand for it isn’t scaling back, and if today’s events are any indication, uranium is moving in much the same way.
What’s Next for CCJ Stock
Those who hold CCJ stock have likely been enjoying the ride. The good news is that it likely isn’t over yet. If uranium is going to be as important a component in how power is produced moving forward, the need for companies to mine it will only increase.
Uranium could easily be the next fundamental element in the race toward a sustainable future. Sprott certainly seems to think so, and plenty of other investors seem to agree.
Despite today’s excellent day for uranium miners, shares of CCJ stock and its competitors are still relatively low, making this an opportune time to buy before the boom continues.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
