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Is Cameco Corp. a Good Uranium Stock to Add to Your Portfolio?

Stock MarketsSep 14, 2021 11:31AM ET
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© Reuters. Is Cameco Corp. a Good Uranium Stock to Add to Your Portfolio?

The price of shares of the world’s largest uranium producer, Cameco Corporation (NYSE:CCJ), has gained in triple digits over the past year with institutional and retail investors’ growing interest in the commodity. However, with relatively low profit margins and bleak short-term growth prospects, we think the stock looks highly overvalued at its current price level. So, will increased meme investor interest help the stock attain fresh highs soon? Read more to find out. Headquartered in Canada, Cameco Corporation (CCJ) is the world’s largest publicly traded uranium manufacturer and supplier. The company has a licensed capacity to produce 53 million pounds of uranium annually because its operations are backed by 455 million pounds of proven and probable mineral reserves.

As a critical element in carbon-free nuclear energy production, yellow cake plays a vital role in clean energy production. With major economies investing heavily to increase renewable energy production in lieu of fossil fuels, CCJ is poised to emerge as a major supplier of uranium globally.

However, recently, uranium prices reached six-year highs, bolstered by Sprott Physical Uranium Trust’s immense buying spree. This, coupled with increased retail investor interest in the commodity, fueled by Reddit group r/UraniumSqueeze, has driven CCJ to a 123.6% price gain over the past year and 82.5% year-to-date.

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Is Cameco Corp. a Good Uranium Stock to Add to Your Portfolio?
 

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