The uranium production sector is one I've kept my eye on for some time now. We have not jumped in due to poor supply and demand fundamentals, broadly speaking, for uranium.
In recent months, however, the sector appears to have found a balance, enticing me to take another look under the hood. The company I'm going to focus on this article is a key Canadian uranium producer, Cameco Corp. (TSX: CCO)(NYSC: CCJ).
Cameco is a great company to consider for investors who are generally bullish on uranium, as this is among the largest producers globally of the radioactive material. Cameco is often the proxy many in the financial community look at when tracking the uranium sector. Thus, its stock price is a great bellwether of performance in uranium in general.
The company’s share price has performed very well, up nearly 70% from March lows, as investors appeared to be buying into the bullish story of uranium.
I think a number of factors could take uranium markedly higher over the long term. However, like other commodities, there are near term headwinds with uranium, like most commodities that have become cause for concern in terms of finding a market bottom.
With Chinese and Japanese demand likely to remain robust, and a push toward environmental, social, and governance (ESG) mandates by governments globally, uranium could outperform other commodities over the coming decade. For those seeking a great uranium company to add to a watch list, I recommend Cameco as such a company.
Invest wisely, my friends.
