Cameco (CCJ:NYE), the world’s second-largest uranium producer, has been waiting for years to emerge from the shadow of a bear market that has plagued the uranium industry since 2007. However, new trends in the energy market, coupled with a rise in uranium spot prices, have created the potential for a new bull run in uranium, making Cameco a stock worth watching.
The changing public sentiment towards nuclear energy is one of the main factors driving the demand for uranium. With the world aggressively searching for alternative energy sources to replace fossil fuels, nuclear energy has emerged as a viable option, offering a carbon-free, around-the-clock power source that has a much higher energy density than the current set of renewable energy sources.
According to Cameco, 57 new nuclear power plants are under construction globally, and many plants that were expected to shut down are now staying online and expanding their capacity. Additionally, the Sprott Physical Uranium Trust has been buying physical uranium, slowly eating up much of the excess supply in the uranium market.
Despite the challenges that Cameco stock faced during the bear market, the company has turned the corner and plans to increase production dramatically while locking in profitable long-term rates. In 2022, Cameco’s annual production volume spiked 70%, largely due to the rise in uranium spot prices. The company is well-positioned to benefit from the growing demand for nuclear energy, and as uranium prices continue to rise, Cameco stock is capturing the significant upside.
Cameco stock had a solid start to the year, up 32% from December lows, and is within spitting distance of its significant multi-year resistance zone between $29 and $30. The stock has made several failed attempts to hold above this level and recently got rejected in February. With the company set to report earnings on Friday, April 28, investors should keep a close eye on how the CCJ stock reacts to significant headlines related to the conflict between Russia and Ukraine and macro energy market data.
In conclusion, Cameco is emerging as a winner in the new uranium bull market, and investors should consider adding the stock to their portfolio.