Prediction: 3 Nuclear Stocks That Will Pull Back Under a Trump Presidency
Nuclear stocks are glowing green.
Uranium mining companies such as Cameco, Denison Mines, and Uranium Energy have marched higher in lockstep over the past 52 weeks, rising 26%, 28%, and 30%, respectively, through close of trading Tuesday. Utility companies that use nuclear power plants to produce electricity seem popular, too. Inspired by news of its groundbreaking deal to reactivate Three Mile Island and use it to power Microsoft server farms, Constellation Energy shares have gained 87% in 52 weeks — twice as much as the mining stocks.
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But none of those are what I want to talk about today.
Instead, I want to talk about the nuclear power start-ups that hope to replace traditional nuclear power plants like the ones Constellation operates, and generate nuclear power at the local level, using small nuclear reactors. I want to talk about NuScale Power (NYSE: SMR), Oklo (NYSE: OKLO), and Nano Nuclear Energy (NASDAQ: NNE) — and why they’re about to cost investors a lot of money.
Now I don’t want to lump these three stocks all together entirely. There are differences. NuScale Power and Oklo specialize in the development of small modular nuclear reactors, designed to produce a fraction of the power output of a traditional 1 gigawatt-plus nuclear power plant. NuScale’s Voygr modules, for example, are designed to output 77 megawatts of power each.
Like the name implies, though, “Nano” Nuclear is going even smaller, focusing on microreactors producing as few as one to 20 megawatts (i.e., as little as 1/1,000 the size of a traditional nuclear reactor). On its website, Nano Nuclear touts its microreactors’ suitability for even small-scale applications such as powering satellites, spacecraft, and moon bases.
But in general, yes, all three of these companies are developing smaller-than-usual nuclear reactors. More importantly for investors are the similarities in stock performance. Over the last 12 months, Oklo stock is up more than 100%, Nano Nuclear shares have risen nearly 350%, and NuScale stock is approaching an 800% gain!
Oklo, Nano Nuclear, and NuScale, though, also differ from other “nuclear” stocks in another respect: Electric utility stocks such as Constellation usually are consistently profitable, and even uranium miners Denison and Cameco (if not Uranium Energy) generally manage to earn a profit.
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