We came across a bullish thesis on Energy Fuels Inc. (UUUU) on wallstreetbets subreddit page by Rippedyanu1. In this article, we will summarize the bulls’ thesis on UUUU. Energy Fuels Inc. share was trading at $6.64 as of Oct 17th. UUUU’s forward P/E was 60.98 according to Yahoo Finance.
A mining worker in a hard hat and coveralls hammering away at the uranium rich walls of the mine.
Energy Fuels (UUUU) is a mining company primarily focused on uranium production, but it has diversified into rare earth elements (REE) and radioactive isotopes. The company operates in the U.S., where it plays a critical role as the largest producer of uranium and the only company capable of refining monazite, a key rare earth ore.
Energy Fuels generates revenue primarily through uranium production, rare earth processing, and the refinement of other valuable minerals. With ~70 million pounds of uranium assets in the ground and two operational mills, White Mesa and Nichols Ranch, the company is well-positioned to capitalize on rising uranium prices, currently around $83 per pound. The uranium segment alone can deliver significant annual profits, which are expected to grow as the company ramps up production to 5-6 million pounds per year. Additionally, Energy Fuels processes monazite, which is rich in both uranium and rare earth elements, unlocking further revenue streams from critical minerals like dysprosium and terbium. The company is also exploring a new market by commercializing isotopes from their tailings for cancer therapies.
Investors should consider Energy Fuels due to its unique combination of uranium and rare earth capabilities, which few other companies can replicate. At current values, the combined profit from uranium and rare earths could exceed $2 billion annually. The company has no debt, $200 million in liquid cash, and minimal dilution, positioning it as a low-risk, high-upside investment. Energy Fuels’ planned upgrades to the White Mesa mill will further enhance profitability by enabling the concurrent processing of uranium and rare earths by 2028.
Valuation metrics suggest the company is significantly undervalued, with a potential market cap exceeding $10 billion as commodities like uranium and rare earths continue to appreciate. Its diversified operations, lack of debt, and strategic advantage in rare earth refining support a bullish outlook, making Energy Fuels a compelling investment for long-term investors expecting future commodity price increases. The stock could reach $60+ per share over the next five years, with further upside as market conditions improve.
Energy Fuels Inc. is also not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 11 hedge fund portfolios held UUUU at the end of the second quarter which was 8 in the previous quarter. While we acknowledge the risk and potential of UUUU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than UUUU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.