It’s no secret that we are on the cusp of a global energy crisis. Electricity utility prices are high – and rising – around the world, while political winds are pushing to replace fossil fuels with clean air or solar power. The price constraint is compounded by the inherent costs of those clean energy technologies in the form of materials and required backup generation capacity. And because of this, many governments and power companies are taking a second look at nuclear power.
Say ‘nuclear power’ and far too many people will jump straight to fear of Chernobyl, or Three Mile Island, or Cold War Armageddon – but the facts paint a different picture. Nuclear power plant technology has improved dramatically in safety since the 1970s, and the underlying costs – mainly building the facility – will have to be borne only once. This makes nuclear plants a viable option for electric utilities, who are always looking for clean, reliable and safe energy sources.
In a visible sign of a more accepting attitude toward nuclear power, the Vogel Electric Generating Plant in eastern Georgia successfully activated its Unit 3 reactors for testing earlier this month. When fully commissioned, it will be the second new nuclear plant commissioned since 1996.
Given the realities of renewable energy and the various pressures to reduce dependence on fossil fuels, it’s likely that we’ll see more nuclear reactor projects come off the drawing board – so now is the right time to start checking out nuclear-related stocks. There may be time.
Keeping this in mind, we have come up with two such names, according to which tipranks database, provide investors with an opportunity to double their money, or do better. With their substantial upside potential, these Buy-rated tickers won’t break the bank, as each trades at less than $5 per share.
Encore Energy Corporation (European Union,
Nuclear power rests on uranium, which is mined out of the ground – so we’ll start with the mining industry. Encore Energy is a uranium miner with a diversified portfolio of conventional and in-situ recovery (ISR) projects in various stages of pre-production. Projects in the Rocky Mountain region and South Texas are wholly owned and offer the promise of environmentally sound, domestic uranium production.
ISR is a mining technique designed to minimize economic damage. The mining company injects fluid into the underground ore strata to dissolve the targeted minerals, which can then be brought back to the surface. The technology can be used in new projects, or to exploit mines that are played by conventional standards.
Encore is still a pre-revenue company, but reported over $28 million in assets in Canadian currency as of September 30, 2022. These assets included $17.3 million in cash. At current exchange rates, these reported assets are US$20.37 million and $12.58 million, respectively.
Cantor analyst Mike Kozak, who is showing confidence in this mining firm, sees several reasons to back Encore.
While sentiment in the uranium sector has turned increasingly positive over the past two years, the market remains in a structural primary supply deficit, a dynamic that has persisted for the past six years… Against this backdrop, Encore Energy and its portfolio Totally US -based uranium projects, are a clear beneficiary,” Kozak said.
“We expect a significant re-rating for the company and the group upon successful transition from development to production and positive free cash flow. With production from its Rosita ISR operation set to resume over the next several months, Encore Energia will be one of the first US-based uranium miners to make this transition,” said the analyst.
Understanding the value of uranium, Cozat rates EU a Buy, and his price target at $5.25 reflects a one-year appreciation of ~178%. (To see Kozat’s track record, Click here,
Only two Wall Street analysts have weighed in on Encore, but they both agree that the stock is a Buy — to an Unanimous Positive Moderate Buy consensus. The stock is selling for $1.88 and has an average price target of $5.12 which suggests an upside of 172% heading into the year. (Look EU Stock Forecast,
GSE Systems, Inc. ,gvp,
Nuclear power plants do not exist in a vacuum, and there is an entire service industry behind the scenes, providing support – simulation and training systems – to nuclear plant operators. GSE Systems, another stock we are looking at, is one of them. The Maryland-based company provides engineering and workforce solutions for the clean energy sector, through a range of high-quality simulation products and hands-on tasks. GSE’s services allow the plant workforce to fill their operational gaps and adapt to their new technologies.
GSE last reported its Q3 22 financial results in November. The company has registered a decline Incomeup 7% year-over-year, to $11.9 million. At the bottom line, the company reported an operating loss of $9 million, or 42 cents per share. Those declines and losses overshadowed some better news. GSE’s performance and engineering revenue grew 9% y/y for the quarter, and software and support sales grew an impressive 147% from 3Q21 to $2 million. New orders for company services increased 49% quarter-over-quarter to $10.2 million.
Given its $0.85 share price, HC Wainwright 5-star analyst Samir Joshi believes now is the ideal time to get on board.
“Investors seeking to profit from the expected growth in the nuclear power industry currently have access to large-cap publicly traded power companies such as PG&E (pcg), Duke (Duke), and constellation energy (CEG) that owns and operates nuclear power plants, and some medium-sized nuclear service companies such as BWX Technologies (bwxt, But many companies that provide nuclear services are either private or are branches of larger companies. GSE is one of the few publicly traded micro- or small-cap growth companies operating in the nuclear power industry, and provides investors with an option to participate in the growth opportunity,” Joshi said.
“At current levels, the GSE stock is trading at an EV/LTM revenue multiple of 0.4x as compared to an average of 1.7x for the company’s peer group. We believe the company is still undervalued and the stock offers an attractive entry point for investors at these levels.’
The profit potential prompts Joshi to rate GVP a buy, and set a price target of $261 to suggest a one-year upside of 3%. (Look gvp stock forecast,
Some stocks fly under the radar, and GVP is one of them. Joshi’s is the only recent analyst review on this company, and it is decidedly positive.
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disclaimer: The views expressed in this article are those of select analysts only. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.