Energy Fuels (UUUU 16.81%) stock, involved in mining both uranium and rare-earth metals, soared 18% through 10:35 a.m. ET Monday after China threatened to throttle rare-earth exports to the United States.
President Donald Trump reassured investors that China isn't serious, and everything "will all be fine." Not everyone seems 100% convinced, however, and shares of pretty much every stock having anything to do with rare-earth materials -- Energy Fuels included -- is rising on elevated risk to the supply chain.
Image source: Getty Images.
Bad news for US is good news for UUUU
London's Financial Times reports that the U.S. Defense Department will build a $1 billion stockpile of critical minerals to ensure supply chain continuity for defense systems.
Jamie Dimon, CEO of investment bank JPMorgan Chase (JPM 2.39%), is adding fuel to the fire. He commented that it is "painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing -- all of which are essential for our national security," and the JPM CEO says his bank plans to invest $10 billion, in loans and direct investments, over the next decade, to support several critical sectors: defense and aerospace, artificial intelligence and quantum computing, energy technology, and supply chain and advanced manufacturing.
Is Energy Fuels stock a buy?
Dimon's prediction aligns well with news last week that Energy Fuels is raising $700 million in convertible debt. Even with $115 million in annual cash burn, Energy Fuels' move last week gives the company six extra years to grow its rare-earth and uranium businesses and reach profitability.
Valued at more than 200 times next year's earnings, Energy Fuels isn't a buy just yet, but the picture is at least getting clearer.
