URNM - URNM ETF: A Good Opportunity To Load Up Again

2024-04-01 17:26:33 ET

Summary

• URNM has doubled the performance of the S&P 500 over the past year, but has recently seen a 16% drop in value and $150m in fund outflows over the past two months.
• Despite short-term volatility in spot prices, the long-term outlook for uranium remains positive due to the structural deficit that will linger.
• Uranium stocks may not be the best rotation bet within the broad metals and mining space, but we feel the risk-reward on the standalone chart looks rather healthy.

Introduction

Over a year ago, we had initiated a bullish thesis on the Sprott Uranium Miners ETF ( URNM ), a $1.6bn sized ETF that offered coverage to 45 stocks with strong exposure to the uranium mining industry (at least 50% of the constituents’ assets are required to be devoted to this industry). From the publication date, until now, URNM has managed to deliver compelling alpha, outperforming the S&P 500 by 2x (total returns of 61%)....

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