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Top Hedge Funds Are Doubling Down on Uranium Stocks

October 31, 2023
x min read

Uranium has been on a relentless rise. And hedge funds are starting to get in on the action.

What’s happening:

Who is making moves:

  • Terra Capital, Segra Capital, Argonaut Capital Partners are some of the notable hedge funds who have recently publicly stated they are betting on publicly listed uranium companies
  • Some of the companies hedge funds are taking positions in include Cameco Corporation (TSX: CCO), Energy Fuels (TSX: EFR), NexGen Energy (TSX: NXE) and others

Why it matters:

  • Uranium was widely considered out of favour over the last decade after the historic accident in Fukushima, Japan in which an earthquake caused multiple nuclear reactors to leak toxic elements into the environment
  • Nuclear energy is one of the most important sources of low carbon, low emission power for the future and has become increasingly more relevant in the global pursuit of net zero emissions

By the numbers:

  • The price of physical uranium is up 120% over the last three years
  • The amount of total capital invested in uranium ETFs has increased by a staggering 20x in the last three years
  • Canadian mining legend Eric Sprott’s uranium ETF is up +40% since the beginning of this year

Going deeper:

  • The supply and demand dynamics of uranium are unique as uranium being purchased today will power nuclear plants in the coming years
  • Finding new sources of uranium production is not an easy task as it can take more than a decade to go from discovering uranium to actually being able to produce it
  • Another factor driving a surge in demand for uranium is that small modular reactor projects from companies such as General Electric and Rolls Royce are beginning to show signs of validation and commercial viability

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