Nexgen Energy (NXE) is a recent uranium company that has come into my radar. I posted numerous times about another company called Energy Fuels Inc (UUUU) but Nexgen Energy appears to be in a better fundamental standpoint. First, it has discovered multiple uranium deposits and the company continues to find more even the past week. Second, the uranium deposits are of higher quality than the current mines currently out there. Third, these deposits are close to the same amounts that Cameco (CCJ) and are poised to overtake the amount of uranium in comparison.
Nexgen Energy is a $750 million cap company while Cameco is a $3.7 billion cap company. If it were to have equal uranium deposits, there is plenty of growth for Nextgen Energy to grow in the future. It also recently received $110 million in funding from CEF Holdings. This company is part of a larger conglomerate of businesses controlled by Li Ka-Shing who also is known as the “asian Warren Buffett”. He invests in many asian countries and knows the market very well.
China is a energy hungry country that is in process of constructing and completing multiple nuclear plants in the next decade. Li Ka-Shing knows the market going forward and that uranium will be a necessary commodity for China to fuel their nuclear power plants. It makes sense that he would accumulate shares in this smaller company that would give him a bigger stake in ownership. I do believe their is a chance of being acquired in the future but the fundamentals show that Nexgen Energy will have a bullish future ahead as well.
Disclosure: I did recently purchase NXE by selling some of my holdings in UUUU.
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