SPECIAL REPORT The Top 7 Stocks for 2024

Uranium Underdogs: 3 Stocks Poised to Profit from the Nuclear Boom

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  • With the world only consuming more energy resources, these uranium stocks may fly.
  • NexGen Energy (NXE): NexGen is a risky upstream specialist with strong upside potential remaining.
  • Anfield Energy (ANLDF): Anfield Energy is small but making the right moves for future success.
  • Paladin Energy (PALAF): Paladin Energy enjoys a big geopolitical advantage.
Uranium Stocks - Uranium Underdogs: 3 Stocks Poised to Profit from the Nuclear Boom

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Rather unexpectedly, uranium stocks have taken the early spotlight in 2024. Previously, the sector suffered from a supply glut, keeping mobility in the sector muted. Not helping matters was the ever-present fear of a nuclear meltdown. Though such incidents are thankfully rare, when they do happen, they can be utterly catastrophic.

However, circumstances have shifted, to say the least. Earlier, The Wall Street Journal reported that Kazakhstan’s state uranium company Kazatomprom warned it will likely fall short of its output targets over the next two years. The company cited shortages of sulfuric acid, a critical component of the broader processing functionality. As well, it suffered delays in completing construction works at newly developed deposits.

According to data compiled by Statista, Kazakhstan represents the largest uranium producer in the world. As a result, it plays a huge role in global energy dynamics. With circumstances unlikely to normalize anytime soon, several sector players have soared. And with these extremely speculative uranium stocks, you can potentially go nuclear with your returns.

NexGen Energy (NXE)

Uranium on top of black rock background.
Source: RHJPhtotos / Shutterstock

According to its annual information document, NexGen Energy (NYSE:NXE) is a Canadian corporation with a focus on developing into production the 100% owned Rook I Project. This mining field is located in the southwestern n Athabasca Basin of Saskatchewan, Canada. Supporting the cause is a highly experienced team of uranium industry professionals commanding a successful track record in the discovery of uranium deposits and in the development of projects from discovery to production.

Here’s why that’s important. At the most elemental level, the world needs uranium – the WSJ made that abundantly clear. As well, consumption needs will likely increase with the booming economy in the U.S., which could spill over to other areas. But another factor to consider is that the free world needs uranium. Basically, we need to minimize our dependency on countries like Kazakhstan, particularly with its close ties to Russia.

Of course, the risks are intense. When companies use terms like “exploration,” that’s only half the component of a true upstream player. And that’s an overly complicated way of saying NexGen is pre-revenue. Still, analysts don’t mind, rating NXE a unanimous strong buy. Thus, it’s one of the uranium stocks to consider.

Anfield Energy (ANLDF)

CCJ Stock: Hand in long yellow glove holding a chunk of uranium material
Source: shutterstock.com/RHJPhtotoandilustration

Okay, I’m not even going to bother asking you out to lunch first. Instead, we’re diving into extreme speculation with Anfield Energy (OTCMKTS:ANLDF). Yes, it’s a five-letter ticker which means it’s not even listed on a real exchange. Rather, it’s traded over the counter via broker-dealer networks. These days, assuming your brokerage even handles OTC securities, you’ll get a warning before acquiring equity in such enterprises.

Still, what I like here is the technical profile. And by technical, I mean technical analysis – not the science of nuclear energy. Since October 2020, it appears that ANLDF has been charting a series of higher lows. For example, in the summer of 2023, ANLDF closed at the lowest at 4 cents, above 2020’s 3-cent bottom. Year-to-date, Anfield has quietly increased its market value by nearly 12%.

Fundamentally, according to a Stockhouse article, the uranium and vanadium miner advanced several milestones in 2023. Further, the company states that it’s on track for more growth this year. Now, from the information that I see, Anfield represents a pre-revenue enterprise. So, you’ll have to truly believe in the narrative.

Still, with its focus on the acquisition and advancement of strategic assets, it could be one of the uranium stocks to gamble on.

Paladin Energy (PALAF)

uranium, a mineral used in nuclear research
Source: RHJPhtotoandilustration / Shutterstock.com

Another OTC-based entity, Paladin Energy (OTCMKTS:PALAF) also requires ample warning. Again, as a five-letter ticker, it could suffer from volatility risks. Also, OTC stocks incur “administrative” woes such as wide bid-ask spreads. If you trade options, you know what I’m talking about. If you’re not careful, you could be profitability in theory but not in reality. Just keep that in mind with these types of wagers.

Still, the Western Australian-based uranium production company offers significant appeal to speculators. Over the past 52 weeks, PALAF gained 67% of equity value. In fairness, recent sessions have been choppy. But with the broader fundamentals of economic expansion, population growth and rising resource consumption exacerbating Kazakhstan’s production shortfall, Paladin remains a compelling opportunity.

As mentioned earlier, Paladin enjoys a geopolitical advantage. As energy needs rise, it’s in the best interests of the U.S. and western countries to avoid excessive dependencies on nations with questionable ties or allegiances. We already see how a grand scale refusal to follow the international order can spark downwind consequences.

Recognizing this vulnerability, I see more emphasis placed on western-friendly mining projects. Also, analysts rate PALAF a unanimous strong buy.

On the date of publication, Josh Enomoto 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.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.


Article printed from InvestorPlace Media, https://investorplace.com/2024/02/uranium-underdogs-3-stocks-poised-to-profit-from-the-nuclear-boom/.

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