Uranium’s Bright Future: Smith Research’s Top Stock Picks

Andrew Weekly of SmithWeekly Research goes over some of his top uranium stocks to look into.

Founded in 2007, SmithWeekly Research is an independent market research firm, with a focus on the natural resource sector.

SmithWeekly prides itself on research with a focus “characterized by terms including cyclical, volatile, contrarian, high-risk, high reward, illiquid, underappreciated, small capitalization, overlooked, complex, material moat, and network critical market focus.”

While this may seem like a tall order, SmithWeekly has been reporting on stocks in the natural resource sector with impressive results.

In light of these results, we sat down with Andrew Weekly, the founder and CEO of the company, to go over his method and what companies he believes will be worth your while in 2023.

Andrew Weekly has 18 years of experience in the investment space and ten years in analysis.

While Weekly’s experience is eclectic, for the past seven years, he has put his time and energy into the natural resource market, specifically uranium.

 

Uranium is Compelling

Weekly told Streetwise Reports that SmithWeekly began research on the uranium sector in late 2015/early 2016, not sending out an official report on the sector until 2017. They prided themselves on doing a year of prep before making any decisions and have been bullish on the sector ever since.

Regarding uranium, Weekly said, “It is one of the most compelling areas in the market to look at. It has quite a wide moat. It’s a very small sector compared to places like the gold or copper sector, other critical metals, and even a lot of base metals.” This is one of the reasons SmithWeekly has centered itself within the sector for so long.

When asked what companies Weekly would recommend, he said, “I think it’s important for your audience to understand that some of these companies that we’ve been following and been a part of for a number of years, we own at a level much lower than today’s prices.”

He specified that this doesn’t mean you shouldn’t consider the companies in their portfolio. However, it must be understood that things within the sector ebb and flow.

With that in mind, Weekly did share a few companies that are in the sector.

Cameco Corp.

“We like everything that Cameco Corp. (CCO:TSX; CCJ:NYSE) is doing in the market,” Weekly started. Cameco is a major global supplier of uranium, a fuel used to power nuclear energy reactors around the world. As one of the largest uranium mining and milling companies, Cameco owns interests in operations capable of producing over 30 million pounds of uranium concentrate per year. [OWNERSHIP_CHART-173]

The company has proven and probable uranium reserves exceeding 469 million pounds. In addition to mining and milling uranium, Cameco provides refining, conversion, and fuel manufacturing services. The company is a large employer of Indigenous peoples in Canada, where most of its land holdings and mining operations are located in northern Saskatchewan. Cameco helps meet the growing demand for emissions-free nuclear energy to support net-zero climate goals.

Regarding the company, Weekly stated, “They are supporting better pricing and a healthier market going forward. Cameco is a great choice for safer money that needs capable hands. Cameco is also edging near the closing of their strategic move to acquire an interest in Westinghouse Nuclear, a notable brand name, and preferred supplier in the fuel cycle.”

According to Reuters, 73.10% of Cameco Corp. is with institutional investors. Fidelity Management & Research Company LLC has 5.07%, with 21.99 million shares. The Vangaurd Group Inc. has 3.49%, with 15.13 million. Capital World Investors has 3.29%, with 14.28 million. Mirae Asset Global Investments (USA) LLC has 2.87%, with 12.44 million, and T. Rowe Price Associates Inc. has 2.35%, with 10.19 million.

0.40% is held by management and insiders. Director Tim Gitzel has 0.10%, with 0.44 million shares, and Executive Vice-President and Chief Financial Officer Grant Isaac has 0.06%, with 0.27 million.

The rest is for retail investors.

Market Watch notes that the company has a market cap of US$16.43 billion, 433.31 million shares outstanding, and trades in the 52-week range between US$21.22 and US$42.17.

You can see Cameco’s investor page here.

Deep Yellow Ltd.

Deep Yellow Ltd. (DYL:ASX) [OWNERSHIP_CHART-3002]

The first Weekly touched on was Deep Yellow Ltd. (DYL:ASX). Deep yellow Ltd. is a uranium exploration company, focused on developing one of the largest global inventories to establish a +10Mlb per annum, multi-mine producer and provide security and certainty of long-term supply into a growing market. Deep Yellow has two projects. One is in Namibia, and one is in Western Australia. Weekly said that while they are a development-focused company, it is very likely they could be a producer in the future.

According to Reuters, 5.65% of the company’s stock is with management and insiders. CEO John Borshoff has the most out of management at 1.99%, with 15.01 million shares, and Executive Director Gillian Swaby has 1.29%, with 9.76 million.

23.70% is with institutions and strategic investors. Paradice Investment Management Pty. Ltd. has the most at 8.04%, with 61.01 million shares. Alps Advisors Inc. has 6.27%, with 47.58 million. Mirae Asset Global Investments (USA) LLC has 4.70%, with 35.61 million.

3.83% is with strategic investors. Lexband Pty. Ltd. has the largest in this category at 2.50%, with 18.96 million shares.

The rest is in retail.

Deep Yellow has a market cap of AU$955.57 million and 758.39 million shares outstanding. It trades in the 52-week range between AU$0.475 and AU$1.395.

You can view Deep Yellow’s corporate presentation here.

enCore Energy

Next, Weekly recommended enCore Energy Corp. (EU:TSX.V; ENCUF:OTCQX). enCore is a uranium development company based in the United States. According to the company, “enCore is focused on becoming the next uranium producer from its licensed and past-producing South Texas Rosita Processing Plant by 2023.” [OWNERSHIP_CHART-10356]

Weekly explained, “enCore energy is a U.S.-focused ISR company and has our meeting in situ recovery. So they have 100% Focus on United States ISR production and development. And they have projects both in Texas and Wyoming and some other jurisdictions as well.”

According to Reuters, 2.13% of the company’s stock is held by management and insiders. Executive Chairman William M. Sheriff. MSc has 1.36%, with 2.03 million.

24.60% is with institutions and strategic investors. Mirae Asset Global Investments (USA) LLC has 3.63%, with 5.38 million shares. Commodity Capital AG has 1.35%, with 2 million shares, and State Street Global Advisors (US) has 1.28%, with 1.90 million.

The rest is in retail.

EnCore Energy has a market cap of CA$604.96 million and 144.38 million shares outstanding. It trades in the 52-week range between CA$2.42 and CA$4.75

You can view EnCore Energy’s corporate presentation here.

Ur-Energy

Keeping focus on the United States development and restart segment, Ur-Energy Inc. (URG:NYSE.MKT; URE:TSX) is on his list. He said, “Despite Ur-Energy being a frequently overlooked ISR restart company in Wyoming, notable expansion potential exists via the development of pipeline projects at Shirley Basin and Lost Soldier. [OWNERSHIP_CHART-525]

Additional capacity at the Lost Creek facilities can be filled out with these satellite projects as well as through toll processing from peer companies in the region. As work progresses and initial cash flows start coming in, we expect expansion work to follow shortly after, bringing the potential of 1.5-2 million pounds of production from Lost Creek in the next 24 to 36 months and potentially more thereafter once the local pipeline is developed.

Timing and aggressiveness based on uranium pricing underpinned by term contracts to back up the capital expenditures. The team at Ur-Energy has very good ISR expertise and has a proven production center around them with attractive cost profiles.”

According to Reuters, 51.37% of the company is held by institutional investors. MMCAP Asset Management has 9/76%, with 25.94 million shares. Alps Advisors Inc. has 6.21%, with 16.51 million. Sprott Asset Management LP has 5.76%, with 15.30 million. CQS (US) LLC has 4.89%, with 13.01 million, and Azarias Capital Management LP has 4.65%, with 12.35 million.

1.75% is with management and insiders. Director Willaim Boberg has 0.39%, with 1.04 million.

The rest is in retail.

Market Watch notes that Ur-Energy’s market cap is US$398.62 million. It has 264.93 million shares outstanding and trades in the 52-week range between US$0.82 and US$1.68.

You can view the company’s investor presentation here.

Cosa Resources

Last but not least, Weekly mentioned Cosa Resources Corp. (COSA:CNSX;COSA:CSE). Cosa Resources is a Vancouver-based mineral exploration company focused on uranium projects in Canada’s Athabasca Basin, northern Saskatchewan. The company has a portfolio of seven underexplored uranium properties totaling over 147,000 hectares in the uranium-rich Athabasca Basin region. [OWNERSHIP_CHART-10883]

The leadership team behind Cosa Resources has extensive experience and a proven track record with uranium exploration and discovery in the basin after their success with the discovery of the Hurricane deposit while at IsoEnergy. With its portfolio of early-stage uranium projects, Cosa Resources is well-positioned to potentially make new discoveries in this proven Canadian uranium mining jurisdiction.

In a July interview, Weekly mentioned the team’s discovery of a uranium deposit in the eastern Athabasca Basin in 2020 at their former company, IsoEnergy. Thereafter, the team departed to form Cosa Resources, a new startup focused on early-stage uranium exploration in the east Athabasca Basin region. This area has better infrastructure and more productive capacity compared to other parts of the basin. The goal of the new company is to repeat the IsoEnergy success. The projects are early-stage greenfield exploration with high risk but have strong potential.

Weekly also mentioned that the company is led by CEO Keith Bodnarchuk, who is well-positioned to lead the company forward. The exploration team, led by Steve Blower and Andy Carmichael, has demonstrated abilities with recent successes just a few years ago. While very high-risk with no drilling yet, the company offers upside potential for those willing to take on the risk in the hunt for new uranium deposits in this prolific region, Weekly commented.

Reuters reports that 17.18% of the company is held by management and insiders. Executive Vice President & Director Wes Short has 5.03%, with 2.32 million shares. President, Chief Executive Officer, Director Keith Bodnarchuk has 4.14%, with 1.91 million. Chairman Steve Blower has 3.70%, with 1.70 million, and Vice President of Exploration Andy Carmichael has 2.34%, with 1.08 million.

The rest is with retail.

Market Watch reports that Cosa has a market cap of CA$$12.44 million. It has 43.66 million shares outstanding and trades in the 52-week range between CA$0.29 and CA$0.32.

You can view the company’s investor presentation here.

On a final note, Weekly mentioned, “While we covered some of the companies we are focused on within this article, we’ve not discussed all of them, and we encourage interested parties to consider SmithWeekly Research to obtain all information about the sector as well as the opportunities we are looking at. We also remind readers that this is only a small starting point for you to do your own review and research on the sector. We encourage you to do your own work and make your own decisions.”

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( Companies Mentioned: CCO:TSX; CCJ:NYSE, COSA:CNSX;COSA:CSE, DYL:ASX, EU:TSX.V; ENCUF:OTCQX, URG:NYSE.MKT; URE:TSX, )

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