Transcription
We are experiencing a new age with artificial intelligence where we now have access to it literally on a daily basis. All of the big companies, well, they are in a huge battle to create the largest supercomputers and to create the most powerful models. This technology explosion has caused companies like Nvidia to have massive growth, where its stock is up over 190% year-to-date.
But AI does have an Achilles heel. Are you aware that it takes 10 times more energy to query ChatGPT than it does for a simple Google query? At our current consumption, it's estimated that data center electricity needs will grow by 160% by 2030, and that's probably an understatement. As much as we love to leverage clean energy from wind and solar, they simply can't provide consistent energy for data centers. With all of these major companies pledging to have zero emissions by a certain time frame, they need to find cheap energy with no emissions.
And that brings us to the nuclear Renaissance that's happening today. Now, we're not talking about traditional nuclear power plants that take literally 5 to 10 years to build, but rather small modular reactors or micro reactors that can be built in 2 to 3 years. For obvious reasons, nuclear energy is a great opportunity for us to invest in.
Now, I have covered some of these companies and ETFs in the past, but I have had a lot of requests recently to review them all over again. So, I'll make certain to cover the top seven nuclear companies and also the top ETF within the sector. I don't want to waste any of your time, so the companies that I'll be speaking to happen to be New Scale Power, Nano Nuclear, Kamiko, Constellation, OKO, Centris, BWX, and I have a bonus of Hitachi.
If the list is all that you want and you're not interested in me covering why some are more important than others or why I'm willing to invest in some versus others, then hey, I completely understand. There are no hard feelings for not giving me any likes or even considering subscribing. But hey, to help you out even further, I also have a spreadsheet down in the description so you can research all of these companies on your own.
With that said, let's get started with the first company, New Scale Power, where they received certification from the U.S. Nuclear Regulatory Commission (NRC) for their 50-megawatt electricity reactor. A term that you'll hear me mention several times is SMR, which stands for small modular reactor. New Scale offers a new Voyager design that is modular and scalable, with each module producing 77 megawatts of electricity. The reactors are extremely small, taking up 1% of the space of a conventional reactor.
Overall, New Scale Power has a first mover advantage for being the first company to submit the small reactor plans to the NRC, and they're the first to get approval. Now, the company did have a major project in Utah that was recently canceled due to going way over budget. However, they do have 19 agreements in place to have plants operational starting in 2029. This company is literally in its early stages, where it happens to be up an incredible 562% year-to-date. But when we take a step back and look at the financials of the earnings and the profit margins, they are increasing year-over-year, but it's still highly negative.
The debt to assets chart on the right-hand side is growing as a percentage, which is not ideal. I really don't see a need to look any further as the financials really don't show a stronghold of the fundamentals, and I would not personally invest in the stock right now. Granted, there's probably a ton of you that will say, "But Brian, it's up over 500% year-to-date. How could all of those people be wrong?" The reality is a lot of stock prices are based on human hype and behavior; it's not always grounded in fundamentals. In fact, analysts have this as having a negative 36% downside for the next 12 months.
Personally, I'm holding off on investing in this one at least another year or two, but hey, once again, that's just my opinion. The next company is Nano Nuclear, which is creating micro reactor technology like the Zeus solid core battery reactor and Odin, a low-pressure coolant reactor. They are designed to be a portable on-demand nuclear reactor. They are in the early design stages, where they are more of a theory than a physical product. But nonetheless, when we look at their stock year-to-date, they're up over 300%, but it has only been on the stock market for the past 4 months.
This is a company with no financial statements for me to look deeper into, and it's another one that lacks any fundamentals to stand on. Once again, this stock seems to be growing more out of hype than it is grounded in having good financials, and it appears to have a foundation, in my opinion, of sand. It's true that this happens to be a very popular stock in the sector, but I'm going to hold off from investing in this one until it gets a little bit closer to having a physical product. And hey, if you disagree with my opinion, please share your comment below about any information that I might be missing.
Let's face it, companies are seeking out nuclear energy because they're being tasked with being emission-free within the next 15 to 20 years, and they're also working to reduce and recycle more of their waste. This brings me to today's sponsor, Sky Quarry, whose sole purpose is to recycle asphalt shingles into sustainable oil. Seeing as how 15 million tons of asphalt shingles are put into dumps each year in the U.S., this gives SkyQ a major opportunity with their proprietary technology and their upcoming facility that can produce 2,000 barrels of oil a day just from recycling shingles.
They have a closed-loop process to recover material and oil with a recovery rate of 95%. As environmental regulations continue to prioritize waste diversion, SkyQ, which just went public this year, is one of the few experts in this area with the technology for creating recycled oil from asphalt shingle waste. As always, if you'd like to learn more about SkyQ and why they have a competitive advantage, then check them out down in the link below.
The next company, which I think you're going to like, is Kamiko Corp. That's been around for over 35 years, and they're known for uranium mining, conversion, and manufacturing. They have ownership in some of the world's largest high-grade uranium reserves, so everyone will need to work with them to get their reactors up and running. When we take a hot second to look at their performance, not only are they up 27% year-to-date, but they're also up 119% over 3 years and over 500% over 5 years.
Now, the PE ratio is high at 122, but once demand kicks in, then we need to watch and see if earnings follow to drop that PE ratio down. This is a decent company where profit margins have bounced around but have increased in the past 2 years on the graph on the left. However, the debt to assets isn't a great story, given the big increases in liabilities. Mining will have higher expenditures than most other companies, and I don't love that they're missing their earnings per share estimates for the last three quarters.
When we look at analysts, they give this stock an upside of about 7% for the next 12 months. I won't get too hung up on that, but if nuclear is going to grow drastically in the next 10 years, then everyone's going to need uranium, and Kamiko happens to be the source. To me, this is a longer-term play that I’m more inclined to invest in.
We'll follow that up with the company of Constellation Energy, where they recently made news for agreeing to restart 3 Mile Island in connection with Microsoft to help power their data centers for the next 20 years. In an agreement, they estimate that it's going to be worth over $16 billion. They plan to have the plant up and running by 2028. But something that is equally interesting about this company is that they own 49% of Westinghouse, which was a pioneer in the nuclear industry, where they supplied the world's first commercial pressurized water reactor in 1957. Now, they supply technology to nearly half of all commercial reactors today.
In looking ahead, they are at the forefront of small modular reactors and the micro reactors that we're talking about, where they have the funding and the knowledge to realistically take a big share of SMR reactors in the near term. When we look at financials, they happen to be up 128% year-to-date, with a three-year at 56%, and their PE ratio is somewhat reasonable at 35. In looking at the financials, profits went up last year on the left, while the debt to assets ratio went down. However, their percentage is still very high.
Another downside is their operating cash flow going down over the past few years. Analysts do have them with about a 5% upside for the next 12 months. For my money, I'm more willing to look at Constellation for the long-term play, but in the short term, they may be a little bit rocky.
Now, I had mentioned that they own 49% of Westinghouse. The other company that owns the other 51% is Brookfield Renewable Partners, with the symbol BE, but I'm not really going to be talking about them for this nuclear stock video because they're much too diverse.
The next nuclear company to review is OKO, which plans to have a small reactor coming online in Idaho Falls, Idaho, in 2027. They happen to be one of the few companies with a small reactor coming live before 2030, and they do tout that it should be able to run 10 years without having to refuel the reactor. Their model also includes producing radioisotopes for medical and industrial applications to help gain a little bit more revenue.
It's kind of wild to see that this company is up 125% year-to-date, with a three-year at 148%. They don't have a PE ratio because, well, they have no earnings; they are still in startup mode and are burning through a lot of cash. That's why looking at their earnings, debt to assets, and their cash flow just doesn't carry any water. As for analysts, they're seeing a downside of about 59% for the next 12 months.
This is a stock that's really held up on hype, and the fundamentals just aren't there. The potential could be massive, but their cash flow and expectations aren't going to change until they get closer to launching that Aurora plant. They'll need to sell a lot more agreements to build with other energy companies to really warrant this stock price. I get it; this might be a good option to be on the ground floor before they take off, but once again, for my money, I'm not seeing a good reason for such a high stock price. Literally, their market cap is over $2.3 billion, and they don't even have a final product yet.
But I'd love to hear from you if you know of any new information that maybe I've missed. Our next company is Centris Energy, where they are a key supplier of high and low-enriched uranium and fuel design, where they already have advanced agreements with many of the reactor designers that I've already mentioned. The reason they're important is that Centris Energy is a fuel source that many of the reactors worldwide are going to need. They have seen some great upside of over 92% year-to-date and over 1800% over the past 5 years.
An item I like is that their PE ratio is a humble 15.3, which gives them a lot of room to grow if demand does go where we expect it to. Their financials look good, with margins growing on the left and debt to assets going down on the right. However, their cash flow is a little bit of a mixed message. As a fuel source for other companies to expand nuclear energy, I see Centris as one being set up for great long-term success.
Now, I will point out that analysts have it with a negative 34% downside for the next 12 months to temper our excitement, but hey, time will tell on this one. Our next company is BWX Technologies, where they provide nuclear fuel production for commercial and government reactors. They're slightly different because they are tied closely to the government and are the sole provider of certain critical nuclear technologies. They also have a contract with NASA for nuclear thermal propulsion, and as a bonus, they provide cleanup and remediation services and develop radioisotopes for medical purposes.
As for performance, year-to-date, they're up 64% and over 128% over 5 years. Their PE ratio is a bit elevated at 42, and their trading volume is sort of low for their market cap. Their financials look decent, but their margins dropped in 2023, and their debt to assets has come way down. In the lower left, their operating cash flow is growing nicely, and in the lower right, they have been consistently beating expectations, which I think we all like to see.
Once again, this is a company that provides source material that others are going to need. So, as all companies grow, so will BWX. Granted, analysts have it with a 12-month downside of 9%. This is one that I feel a little bit better about investing in during the dips for at least a longer-term play.
Now, I do want to throw out a little bit of a bonus nuclear stock that people aren't really talking about, and then I'll also showcase some of the best nuclear ETFs to invest in. But the bonus company actually happens to be two companies, where they joined to form GE Hitachi Nuclear Energy Group. They have a small modular reactor called the BW RX300 that happens to be going live in Ontario in 2028. GE Vnova, with the symbol G, is the stock that is specific to the nuclear portion for GE, and the Hitachi HTIY stock happens to include the nuclear business all rolled in.
As you can see from the companies that I reviewed today, some of them just happen to be hype, while some of them are truly the real deal. You may be getting in on the ground floor with some of these, but most all of them are priced, in my opinion, way too high, and they're probably going to have a major drop in the next several months. Of course, that's when I'll jump in and buy.
Now, if you'd prefer a safer route with ETFs that do all the work for you, on the screen right now is a list of the top nuclear energy ETFs ranging from the Global X Uranium ETF to the Range Nuclear Renaissance Index ETF. Make sure to let me know in the comments if you'd like me to review all of these nuclear ETFs as a deeper dive.
Once again, thank you so much for watching!