The clouds hung over uranium stocks for a full ten years after the Fukushima reactor meltdown in 2011 have finally showed signs of clearing. Nuclear power may still not be universally popular; however, given concerns about global warming it is increasingly strengthening its profile as a source of non-carbon energy supplies.
US-based Uranium Energy Corp is a uranium mining stock attracting attention thanks to the ability of the stock to allow investors to gain exposure to the nuclear energy sector.
Uranium markets themselves are hard to access, so for many traders buying stocks in the uranium energy sector is the next best way of taking a position. The question, “why buy Uranium Energy Corp stocks?” is best answered by establishing if it can deliver on the mission statement found at the top of the Uranium Energy Corp website homepage, which states:
“Uranium Energy, low-cost fuel for emission-free electricity”
Source: UEC
YOUR CAPITAL IS AT RISK
Where Will UEC Shares Be in 12 Months?
Uranium Energy Corp stock predictions for the next 12 months involve incorporating factors relating directly to the firm’s own actions as well as macro trends.
In a recent upgrade, Roth MKM moved their price target on UEC to $9.50 (from $9).
UEC is unhedged, with no contracts at pre-set prices, which means it is the uranium mining firm most highly leveraged to the price of uranium. If the price of uranium rises, the firm could expand production by bringing less efficient mines online.
The company has a production-ready capacity of 8.5 million pounds U3O8 per year. In its own words, “UEC is the next-generation producer, ready to provide low-cost, low-capital fuel for the country’s large electricity-generating nuclear fleet” (Source: UEC).
The price of uranium in the spot market is also something to monitor as retail investors don’t have any easy ways of buying the metal itself. Therefore, gaining exposure to the nuclear power sector often involves buying uranium mining stocks such as UEC.
According to data compiled by TradingView, analysts are bullish on UEC shares, with six out of six assigning the stock a Buy rating. The average price target of $10.33 per share represents a potential 65% upside from current levels.
UEC News
In a May press release, Uranium Energy Corp. applauded the unanimous consent vote by the United States Senate to pass H.R. 1042, a bill to ban Russian uranium imports into the United States.
In March, Uranium Energy appointed Brent Berg as its Senior Vice-President, SVP, U.S. Operations. Berg was previously the President and CEO of Rare Element Resources Ltd.
In mid-January, the company approved restarting uranium production at its fully permitted and past-producing Christensen Ranch In-Situ Recovery, or ISR, operations in Wyoming.
Earlier in January, shares of companies in the uranium sector, including Cameco, NexGen Energy, Uranium Energy, Energy Fuels, and Ur-Energy, jumped after the US Department of Energy issued a request for proposals for uranium enrichment services to help establish a reliable domestic supply.
Who is Uranium Energy Corp (NYSE: UEC)?
Any Uranium Energy Corp stock prediction has to start with a big disclaimer. Prices are highly volatile due to the market being subject to a range of technical and fundamental factors.
The extreme risk-return ratio associated with UEC stock means the market attracts short-term speculators and day traders as well as buy-and-hold investors. That can lead to dramatic price moves such as the +165% price surge in UEC stock seen between 27th January and 14th April 2022, and the almost halving of the share price between 2nd February and 2nd May in 2023. 162% price surge between the 23rd of August and the 8th of November 2021, or to drop by 22.14% in the space of one week as happened after the 15th of November 2021.
Uranium Energy Corp can be seen as a buy or a sell and indeed both depending on which investment time horizons are being used. The one certainty is that UEC offers something for everyone.
Founded in 2003, Uranium Energy Corp. has its headquarters in Corpus Christi, Texas. Its stock is listed on the New York Stock Exchange under the ticker UEC.
Uranium Energy Corp is a diversified, US-focused uranium company. Its core operations are US-based and follow a streamlined business model. The firm is very much about getting uranium out of the ground and to US-based customers.
The hub-and-spoke operations in South Texas centre around the fully licensed Hobson Processing Facility, which is central to the Palangana, Burke Hollow and Goliad ISR projects. It also boasts the largest permitted, pre-construction ISR uranium project in the U.S., in Wyoming. The firm’s operations are located close to its main market, US nuclear energy producers, which means the company is well positioned to take advantage of any short-term spikes in uranium prices.
The company’s management team is made up of experienced industry experts. Amir Adnani, who holds the positions of President, CEO and Director of Uranium Energy Corp, has been a key player in the firm’s growth and the rest of the management team also have many decades of hands-on experience in the key facets of uranium exploration, development, and mining.
YOUR CAPITAL IS AT RISK
Uranium Energy Corp is not the largest firm in the uranium mining sector, but it is large enough to merit being covered by six analysts from institutional investors. It may be smaller than some of its peer group, but UEC’s close correlation to uranium prices and self-defined approach as an insurgent stock mean UEC is a uranium miner catching much attention.
UEC Long Term Stock Forecast
Any Uranium Energy Corp’s long-term stock forecast will be based mainly around the price of uranium. The firm’s stock price is closely correlated to the price of the metal it mines and of which it has substantial extra reserves.
Capital investment on exploration projects and the setting up of the infrastructure required to extract minerals takes time. but once a new mine is opened the ongoing running costs can be small in comparison to the cost of getting the operation set up in the first place.
If there is a spike in the price of uranium on the open market it can lead to a greater proportional percentage increase in Uranium Energy Corp profit margins. If uranium prices in the spot market are $40 per pound and increase by 10% to $44, then the increase in the UEC profit margin will be substantially greater than 10% = (40-38 / 44-38) = (2/6) = 33%.
Nuclear energy still divides opinion due to the toxic waste generated, but momentum in the non-carbon electricity generation sector is building. The option of bringing Small Modular Reactors online, which are typically a third of the size of traditional plants, offers an opportunity to expand the use of nuclear power at a faster rate than previously possible. Efforts to reposition the industry as the best non-carbon alternative include the firm recently upgrading its Corporate and Social Responsibility (CSR) policy.
As the Uranium Energy Corp website states, the firm has “launched formal development of an Environmental, Social and Governance (“ESG”) program to build on the Company’s robust safety, health, and environmental protection systems in place while identifying new sustainability initiatives for enhancement”. Source: UEC
YOUR CAPITAL IS AT RISK
Is Uranium Energy Corp a Good Buy?
UEC has an advantage over other uranium mining stocks because US based reserves of the metal are seen as a strategic asset. They play a crucial role in ensuring the world’s largest economy can keep the lights on. That positioning is made more relevant by the fact that the US accounts for more than 30% of the global output of nuclear energy.
However, the only thing that can be guaranteed about investing in Uranium Energy Corp is that it would be a roller coaster ride. The extent to which it is a hot topic in the day trading community adds to short-term price volatility, but that does mean it offers investment opportunities to those running short-term or long-term strategies or a combination of both.
