Halyk Finance's Trading Idea: Cameco

Cameco – a leading Canadian uranium producer controlling about 14% of the global supply of the metal. The company is a key leader in the nuclear industry and ranks second in uranium production volume. Unlike most industry players, Cameco is a fully vertically integrated company, covering almost the entire nuclear fuel cycle: from raw material mining to conversion, enrichment, and fuel production. 

The uranium giant owns three main Tier-1 production assets in Canada and Kazakhstan (the Inkai deposit, a joint venture with Kazatomprom). The lion's share of production assets is concentrated in safe jurisdictions worldwide: in Canada – about 85% of production, so the reliability of stable supplies and the absence of country risks attract investors and portfolio managers. As a rule, all else being equal, when managers bet on uranium, they choose Cameco. 

This fact clearly illustrates the first place (by a wide margin) in the structure of the URA ETF exchange-traded fund, which invests in uranium producers' shares. Its share in the fund's assets is 22% and significantly exceeds the shares of other major participants – Sprott Physical Uranium Trust (7%), NexGen Energy (5.9%), Oklo (5.7%), Uranium Energy (4.7%), and Kazatomprom (4.4%). 

Growth drivers:

• Increasing uranium demand
• Growth in financial performance
• Bullish analyst recommendations