During the early part of the last bull market, uranium stocks were one of the hottest asset classes. The main factor was that uranium stockpiles were being exhausted, while new production was below replacement levels. Further, it was generally agreed that nuclear had to be part of the climate change solution even if it was an intermediate step before the world could rely completely on renewables.
Of course, this bullish picture was destroyed by the Fukushima disaster in 2011 when an earthquake and tsunami led to the meltdown of a nuclear reactor. As a result of the accident, many companies decided to shut down their nuclear plants, while other countries decided to halt operations.
Today, as time has passed between this event, perspectives are starting to change. In part, it's due to an energy crisis and soaring electricity prices all over Europe. The same fundamentals that animated the previous bull market is also intact - demand remains steady while supply is uncertain.
In fact, uranium demand is expected to hit new highs over the next decade as several new plants are being built all over the world, and there are some promising developments in terms of "mini reactors" in terms of safety and efficiency.
In addition to more reactors being built, another catalyst for uranium is that the commodity is becoming investable and tradeable. Currently, there is an ETF - the Sprott Physical Uranium Trust (OTC: SRUUF) - that is tracking the price of uranium and also holds it for investors. This is leading to fears that a uranium shortage could be exacerbated by investors especially given that the commodity is necessary for electricity and it's a relatively thin market.
There are also a variety of stocks for investors who want to invest in the sector such as Centrus Energy (NYSE: LEU) which was originally a spinoff from the Department of Energy and is a refiner of uranium. The biggest uranium stock is Cameco (NYSE: CCJ) which has a 126% YTD gain and has exposure to uranium mining and refining. Another option with more risk and potential upside are the exploration and production companies in the uranium space like Denison Mines (NYSE: DNN) and Uranium Energy Corp. (NYSE: UEC).