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Investors Business Daily
Investors Business Daily

Uranium ETF, IBD Stock Of The Day, Flashes Buy Signal Amid Exploding Nuclear Energy Demand

Sprott Uranium Miners ETF is the IBD Stock Of The Day Thursday. URNM stock is flashing a buy signal and was added to SwingTrader on Thursday.

Sprott Uranium Miners offers exposure to a range of uranium production, mining, exploration and development companies. Sprott touts the fund as a pure-play uranium ETF focused on physical uranium and miners. It was reorganized from the North Shore Global Uranium Mining ETF to Sprott Uranium Miners in late April 2022 but maintained the same ticker and strategy.

The uranium ETF has $1.08 billion assets under management as of Oct. 17, according to FactSet data. Sprott lists $1.34 billion in total net assets as of Oct. 18.

Its top holdings include Cameco, National Atomic, Sprott Physical Uranium Trust, NexGen Energy and Denison Mines.

Sprott Uranium Miners ETF has a 0.83% expense ratio as of Oct. 18.

URNM has soared 275.5% since its inception on Dec. 3, 2019, according to Sprott data.

Uranium Demand

The International Atomic Energy Agency (IAEA) expects demand for uranium to explode over the next few years. Roughly 60,000 tons of uranium were required to fuel the world's 410 nuclear power plants, according to a 2022 publication issued by the IAEA and the Nuclear Energy Agency of the Organization for Economic Cooperation and Development.

The agencies forecast demand to rise as high as 100,000 tons per year by 2040 as countries turn to nuclear power to address climate change and sustainable development, the IAEA wrote in a May release. And the IAEA projects nuclear power generating capacity could more than double by 2050.

Meanwhile, uranium spot prices rocketed nearly 144% between January 2021 and Sept. 30, 2023 according to the most recent Cameco data. Spot uranium prices are up more than 41% this year and hovering around $71.58 per pound.

URNM Stock Performance

URNM stock is pushing back above its 21-day moving average and 10-day line to break a sharp downtrend that started in late September. On a weekly chart, the uranium ETF is bouncing from its 10-week line.

Investors could view this pullback as a handle to a base going back to late 2021.

SwingTrader puts the current buy zone between 43.83 and 44.71.

URNM stock's relative strength line is on the upswing and it has a 96 RS Rating out of a best-possible 99. The solid RS Rating means it outperformed 96% of all stocks in the IBD database over the past year.

URNM stock rallied nearly 39% in 2023.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison

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