LEU - Centrus Energy: Right For The Wrong Reasons

2024-01-27 07:51:18 ET

Summary

• Centrus Energy is a leading nuclear fuel supplier to utility customers.
• The company's main attraction was the potential for fuel margin expansion, as the company had secured supplies in 2018/19 while prices have been surging in recent quarters.
• However, the expected margin boost has failed to materialize, leading to a decline in gross profits and disappointing financial performance in 2023.

It has been a while since I last covered Centrus Energy ( LEU ). In my last article, I reiterated my bullish stance on LEU, as the large spread between the market price of SWU under long-term contracts and Centrus Energy's contracted supply costs should translate into an earnings tailwind for the company. I was also bullish on LEU as it had a large deferred tax asset that could be a significant tax shield should the company start making profits....

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