June 29, 2022

Why Energy Fuels, Denison Mines, and Uranium Energy Stocks All Crashed Today

What happened Shares of uranium miners Energy Fuels (NYSEMKT:UUUU), Denison Mines (NYSEMKT:DNN), and Uranium Energy (NYSEMKT:UEC) stocks resumed falling Thursday, dropping 7.6%, 9.7%, and 10.2%, respectively, through 12:50 p.m. EDT after rebounding in price earlier in the week. According to The Wall Street Journal, investors are reacting (or perhaps overreacting) to news that a nuclear power plant in southeast China is seeing an increase in “noble gases in one of its reactors’ primary circuits, which is part of the reactor’s cooling system.”
Cartoon picture of two nuclear reactors generating steam IMAGE SOURCE: GETTY IMAGES. So what Now, Electricite de France SA, which co-owns the nuclear plant, says these gases are not “dangerous in small quantities,” and crucially, we’re not talking about any sort of a radiation leak — yet. In the Journal’s estimation, the sell-off we’re seeing is an “unnecessary investor meltdown” because, as it goes on to explain, “uranium mining companies tend to operate on multiyear supply contracts with utilities, so there is little risk that a nuclear power plant would immediately pull back buying from these mining companies.
” But in reporting on the incident, CNN described this as creating at least the potential for “an imminent radiological threat.” Now what And that could be a concern. Not necessarily because we’re about to see a nuclear meltdown in southeastern China, mind you, but because when the press starts spreading around words like “imminent” and “radiological threat,” it creates the potential to panic investors who may have the Fukushima disaster still fresh in their minds, and remember how that one didn’t just cause Japan (where the incident occurred) to pull away from nuclear power, but sparked denuclearization drives across Europe as well.
As I pointed out earlier this week, the uranium mining industry really isn’t in a good place to withstand any kind of sentiment that might depress demand for its product. With uranium prices still hovering around half the $60-per-pound level that experts say is necessary to sustain profitability, only good news is what these stocks need today, to drive both demand for their product and higher prices for their stock.
No matter how tempest-in-a-teacup the latest news out of China might be, it’s not good news — and so you can expect that to be bad for uranium stocks. Uranium Spot Price Chart URANIUM SPOT PRICE DATA BY YCHARTS. Should you invest $1,000 in Denison Mines Corp. right now? Before you consider Denison Mines Corp., you’ll want to hear this. Our award-winning analyst team just revealed what they believe are the 10 best stocks for investors to buy right now… and Denison Mines Corp.
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We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. The Motley Fool Makes 5G Buy Alert 5G is one of the greatest arrivals in technology since the birth of the internet. And in 2021 and beyond we could see an onslaught of new wealth-building opportunities that would potentially dwarf any that came before them.
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