Welcome to our Friday mailbag edition!
Every week, we receive great questions from your fellow readers. And every Friday, I answer as many as I can.
This week, I decided to focus on just one question.
That’s because it touches on one of my top predictions for 2024 and beyond: the rise of nuclear energy – and the uranium fuel that powers it.
I’ll get to that question in just a moment. But first, some background.
Next Stop: Uranium at $150 a Pound
If you’re a regular reader, you’ll know that I’ve been beating the drum on the nuclear revival for at least a year.
And at my Distortion Report advisory last year, I told readers that uranium prices would rise to $100 a pound in 2024.
They are already up 107% since I started banging the table on the nuclear revival at Distortion Report early last year.
They’ve spiked due to a number of factors – from the pandemic lockdowns to Russia’s war on Ukraine.
Prices are now at $106, the highest level since 2007.
From here, my next target is $150 a pound this year. That’s additively what we saw last year.
Over the very long term, it wouldn’t be impossible to see prices jump as high as $400. To be clear, I don’t expect that to happen this year, next year, or in the next five years…
But with demand for nuclear energy set to triple by 2050, it’s not out of the question in the long run.
The last time uranium prices bottomed in December 2000, they went on a seven-year bull run. They topped out at $140 per pound, for more than a 1,800% return.
If history is a guide, by the time this current bull run is over, we could see uranium prices not only reach new all-time highs but soar far past them.
And the best companies involved in the nuclear revival should rise with them.
A One-Click Way to Play the Nuclear Revival
That’s where today’s question fits in. It comes from reader Jerry K. He asked:
I always enjoy reading your articles. Could you tell us which companies are building SMRs? I know you do not recommend individual companies, so how can the average investor get in on the construction side of SMRs? Is there an ETF that tracks this?
– Jerry K.
Thanks so much for your questions and kind words, Jerry!
I’m thrilled that you asked about SMRs. For readers not as familiar with the term, let me provide some background.
SMR stands for small modular reactor. It’s a new type of nuclear reactor that is smaller than traditional nuclear reactors.
SMRs hold less than 300 megawatts (MW) in capacity. That is a fraction of the capacity of traditional nuclear reactors. That small size means they are easier and cheaper to build.
That’s because SMRs can be built as standalone reactors. Then, they are mass-produced. And then, they are deployed to various locations – from neighborhoods to military installations.
And that brings me back to your first question, Jerry.
There are several companies involved in the construction and development of SMRs.
And you’re right, I can’t recommend buying individual companies here. But I can provide information for all my readers on key firms in this space.
Anyone can use this information to start their own research. Some of the key firms are:
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Westinghouse Electric Company is developing a range of SMR projects around the world. One is the Westinghouse SMR 170. This is a pressurized water reactor that can generate up to 170 MWe of power. Another is Westinghouse SMR 1200. That’s a modular high-temperature gas-cooled reactor (HTGR) that can generate up to 1200 MWe of power. For context, 170 MWe is enough to power 170,000 homes. And 1,200 MWe can power 1.2 million homes.
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General Electric is involved in the design and development of several SMR projects. Their marquee project is the SMR 400 MWe reactor. It’s designed to be compact and scalable. So, it can be easily deployed as a standalone unit or as part of a bigger, more integrated energy system to diverse locations. Plus, it incorporates advanced safety features, including a passive cooling system to avoid overheating in the nuclear energy creation process.
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Holtec International is a private company actively involved in SMR development with several projects underway. Their focus is on waste management solutions. You see, nuclear power generation creates radioactive waste. Holtec is crafting advanced storage technologies to safely dispose of that radioactive waste in its SMR 300 design.
Now, to the rest of your question. How can the average investor gain exposure to SMRs?
Again, I can’t give personal advice. But here’s what I would say to all of my readers…
One option is to use the companies I mentioned above as a place to start your research.
Another is to invest in the Global X Uranium ETF (URA). URA is a simple, one-click way to play the nuclear revival trend.
It offers exposure to nuclear technology development, which includes SMRs, as well as uranium mining companies.
And that’s all for this week’s mailbag! As always, keep your questions coming at [email protected]. Keep in mind I can’t give personal advice.
Happy investing… and have a fantastic weekend!
Regards,
Nomi Prins
Editor, Inside Wall Street with Nomi Prins
P.S. The Global X Uranium ETF (URA) is a great place to start. But it’s possible to do even better with select stocks.
That’s why, at my premium products, I recommend specific companies involved in the nuclear energy revival. Like the two new names I just recommended at my Distortion Report advisory.
One provides nuclear technologies and services for big nuclear power plants. It has been primarily focused on large nuclear reactors. But now, it’s developing its own suite of small nuclear reactors.
The other is developing new nuclear-related technology that could help push shares up 35% over the next 12-18 months.
Paid-up Distortion Report subscribers can read that issue in full here. If you’re not paid-up yet, learn more about a Distortion Report subscription right here.