Energy Fuels (UUUU +13.80%) stock skyrocketed 15.6% through noon ET Tuesday as further details emerged about President Trump's "Project Vault."
Initial reports on Project Vault broke Monday, describing it as a $11.7 billion effort to amass a strategic reserve of rare-earth metals. Rare-earth mining companies such as USA Rare Earth (USAR +15.83%) were first to benefit (and are popping again today). Now, investors in uranium stocks such as Energy Fuels are joining in the fun.
Because it turns out the President also wants to buy some uranium.
Image source: Getty Images.
Project Vault
As CNBC confirms, "the Trump administration's Project Vault stockpile can include any of the more than 50 minerals listed as critical by the Interior Department," including "rare earths, lithium, uranium."
Or as the President put it: "We're not just doing certain minerals and rare earths. We're doing everything."
The bit about uranium is exciting Energy Fuels investors today. It's "has been the leading U.S. producer of natural uranium concentrate for the past several years," making it a logical choice to benefit from $11 billion-plus in government spending to stockpile uranium and other "critical" metals.
NYSEMKT: UUUU
Key Data Points
Is Energy Fuels stock a buy?
But Energy Fuels is not a cheap stock.
"Leading producer" or not, Energy Fuels did less than $80 million in sales over the last 12 months -- and lost nearly $100 million. Its free cash flow situation is even worse, with nearly $145 million in annual cash burn.
Analysts see Energy Fuels sales surging to $420 million by 2029, but even then, profits will be only $0.45 per share. This gives Energy Fuels stock a price-to-earnings ratio of more than 53x... on money Energy Fuels may or may not earn four years from now.
Energy Fuels stock looks speculative to me. Therefore, it's a "sell."
