Why Uranium Stocks Gained Over 10% on Monday

Uranium stocks gained back the losses from last week, especially Canadian small-cap stocks that could make up the hole left by potential Russian sanctions.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 7, 2022 4:15 pm EST

Uranium stocks gained back much of the losses companies saw last week, with many small-cap uranium companies gaining over 10% on Monday.

What happened?

Shares of Uranium stocks like Denison Mines (TSX: DML)(NYSE:DNN), NextGen Energy (TSX: NXE), and Ur-Energy (TSX: URE) all saw shares pop over 10% on Monday. This came after a fall near the end of last week.

The fall came from worries over the Ukrainian crisis. Russia bombed a nuclear power plant, and the United States uranium energy lobbyists urged the White House to maintain uranium from Russia. Worries there could be a sanction on uranium sent shares downward.

So what?

The United States gets much of its uranium from Russia, as it remains a low-cost provider of the energy. While the United States fuels about 20% of its energy from nuclear power, it currently does not have any mining underway, though there are reserves in the country.

This led to an increase in share price for Canadian uranium stocks. Canada has a higher price, it’s true, so the situation isn’t ideal for the United States. But it provides an option to push sanctions on Russia, while maintaining the energy the company needs. So, it’s no wonder Denison Mines and others climbed at the news.

Now what?

Should Russian sanctions be imposed on uranium, these uranium stocks could climb even higher. And that may be a long-term effect. The United States wants to use uranium and nuclear power to move towards a clean energy future, so a partnership with Canada would be a prime way to do that.

For now, it does indeed remain a volatile situation. Nothing is written in stone yet, so this is all movement on the basis of potential deals in the future. Still, these could be the growth stocks many investors are looking for after a winter of stocks falling.

Shares of Denison Mines, Ur-Energy and NextGen were up 7%, 7% and 3%, respectively, as of writing.