Several hedge fund managers have started ratcheting up their exposure to uranium stocks, as they bet on significant price gains.
More than a decade after the shock of Fukushima led a number of countries to review their reliance on nuclear power, it’s cemented itself as a vital plank in the transition toward a low-carbon future. That’s driven up uranium valuations, with prices having risen 125% since 2020.That target is underpinned by demand in Europe, Asia and Africa for nuclear reactors.
“We’re most focused on uranium miners in public markets,” Hyde, a portfolio manager at Segra Capital, said in an interview. “For the supply and demand of this market to balance, we need new assets to come online.” “There are two main barriers to it being considered a serious contender in the race to net zero: skepticism around the safety of reactors and radioactive waste disposal, and cost,” said Nilushi Karunaratne of BloombergNEF. That skepticism is part of the reason why “the number of reactors in operation today has changed little since the immediate fallout of the 2011 Fukushima accident, as retirements have outpaced new facilities coming online,” she said.
Not all uranium stocks are equal, though, and a nearly 30% gain in the Global X Uranium ETF this year has some hedge fund managers looking for opportunities to short companies they think are less likely to do well. Saleur of Anaconda, for example, says he’s now looking into shorting Cameco Corp. as a hedge, after it gained more than 70% this year. But he’s long miners including Energy Fuels Inc. and Ur-Energy Inc., he said.
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