What’s Been Going on With Uranium Stocks UEC, CCJ, DNN Lately?

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  • Uranium mining stocks have been rising recently.
  • News out of Japan is shining a fresh light on nuclear power.
  • Tesla (TSLA) CEO Elon Musk has also taken up the pro-nuclear battle cry.
CCJ Stock: Hand in long yellow glove holding a chunk of uranium material
Source: shutterstock.com/RHJPhtotoandilustration

For the past week, uranium stocks have been rising steadily. This sector-wide surge is likely being driven by a new focus on nuclear energy.

Last week, the Japanese government announced it would be turning to nuclear energy again, 11 years after the Fukushima nuclear disaster. This has been met with controversy but the International Energy Agency (IEA) has outlined some positive effects regarding both energy security and climate change mitigation. The decision also has the support of Elon Musk, who recently said countries should be increasing nuclear power. Uranium is a common fuel used for nuclear fission. Therefore, it makes sense that companies in the space are trending upward.

Several uranium stocks are down today, but the group has still been pushing upward all week. Both Uranium Energy (NYSEMKT:UEC) and Cameco (NYSE:CCJ) have jumped 6% or higher in the past five days. Denison Mines (NYSEMKT:DNN) is also up more than 15% in the past five days.

Does this recent winning streak mean the growth is sustainable? That will depend on several macroeconomic factors for uranium stocks. Let’s take a closer look.

The Road Ahead for Uranium Stocks

By and large, Elon Musk is one of the most influential voices in the energy sector. Recently, the Tesla (NASDAQ:TSLA) CEO also made it clear that he believes in the power of nuclear energy. On Aug. 26, Musk tweeted the following in response to Japan’s pro-nuclear decision:

A few days later, Musk spoke at Norway’s Offshore Northern Seas 2022 conference, taking the opportunity to once again voice his support of nuclear energy:

“We should really keep going with the nuclear plants. I know this may be an unpopular view in some quarters. But I think if you have a well-designed nuclear power plant, you should not shut it down, especially right now.”

This news sent many uranium stocks shooting up, including DNN and UEC stock.

Keisuke Sadamori, Director of the IEA’s energy markets and security office, shares Musk’s attitude toward nuclear energy. According to CNBC, Sadamori called Japan’s decision to restart its nuclear plants “very good and encouraging news both in terms of energy supply security and climate change mitigation.” Sadamori added that, since the Fukushima accident, Japan’s reliance on fossil fuels has increased. This supports Musk’s argument that shuttering nuclear power plants is “bad for the environment.”

If the transition back to nuclear energy helps Japan ease its fossil fuel dependency, other nations may follow. This will create significant demand for nuclear components, potentially sending uranium stocks skyrocketing. InvestorPlace contributor Josh Enomoto sees upside for DNN and CCJ in particular. Enomoto says that “companies like Denison Mines offer the highest reward potential, making them the best uranium stocks to buy for battle-hardened speculators.”

As of now, it’s unclear how the rest of the world will respond to the growing positive sentiment towards nuclear energy. But if Japan can embrace nuclear energy after Fukushima, it’s not unreasonable to think other countries may follow.

On the date of publication, Samuel O’Brient did not hold (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.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/whats-been-going-on-with-uranium-stocks-uec-ccj-dnn-lately/.

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