Gwen Preston: Uranium Market “Very Bullish,” Which Stocks Have Potential?
The uranium sector has been building steam in recent years, leaving investors eager for returns.
At the Prospectors & Developers Association of Canada (PDAC) convention, Gwen Preston of Resource Maven described the market as “very bullish,” saying that diverse factors have contributed to uranium’s turnaround.
Those include deliberate output cuts from producers, supply disruptions related to the COVID-19 pandemic and more recently the entrance of the Sprott Physical Uranium Trust (TSX:U.UN).
There’s also of course the war between Russia and Ukraine, which has set even more alarm bells ringing over supply given Russia’s role in conversion and enrichment.
“(The market) was already undersupplied. Now the critical step for turning the commodity into fuel has had a huge weight put on it, and supply that’s connected to a major producer is tainted, if you want to call it that,” Preston explained during the conversation. “The setup is really insane.”
Uranium’s long bear market has left market participants with relatively few companies to choose from, but there are still ways to hone in on best-of-breed stocks. Preston said she expects discoveries to be “spectacularly rewarded,” but noted that with explorers it’s important to look for companies with good geologists.
She mentioned Fortune Bay (TSXV:FOR,OTC Pink:FTBYF) as a stock she likes, explaining that while the company has been focusing more on gold, the team’s heart is set on uranium and will be able to go in that direction now that market conditions are better. Preston also pointed to ValOre Metals (TSXV:VO,OTCQB:KVLQF), which she said has a very good uranium geologist, and whose Angilak asset was worked during the commodity’s last bull market.
On the larger end, she pointed to Uranium Energy (NYSEAMERICAN:UEC), which recently announced a deal to acquire UEX (TSX:UEX,OTCQB:UEXCF). “Especially as US political momentum around uranium gathers steam, there will probably be a premium for near-term US production,” she said.
Watch the interview above for more from Preston on the uranium sector. You can also click here for our recap of PDAC, and here for our full PDAC playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Fortune Bay is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.