2024-04-08 09:48:14 ET
Summary
- Nuclear power is making a comeback, and companies which service the sector, like BWX Technologies, stand to benefit.
- Investors are showing interest in the uranium market and uranium miners, and prices have spiked.
- I believe BWX Technologies shares have become steeply valued thanks to this underlying positive sentiment.
- The core of the company is in government services, however, and I believe it will be hard to maintain a 30 P/E ratio on this business going forward.
After the Fukushima disaster in Japan, it seemed like commercial nuclear power might be on a long slow decline. Countries like Germany were phasing out their nuclear operations. In the United States, it has been difficult, costly, and time-consuming to attempt to build new nuclear facilities. Several power utilities which have attempted to build new nuclear projects have paid dearly for those efforts and destroyed considerable shareholder value along the way.
But the worst may be over for the nuclear industry. In fact, nuclear is seemingly having a major comeback right now. Power companies are striving to reach increasingly stringent ESG goals. They have to consider all types of clean power generation. Increasingly, nuclear is gaining appeal as a bridge fuel for baseload power generation....
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BWX Technologies: Shares Are Fully Valued After Big Run