Why are ASX uranium shares getting so much attention right now?

Uranium prices are trading at 11-year highs with more strength forecast.

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Key points

  • Uranium prices are trading at the highest levels since 2011 
  • ASX uranium shares have been some of the top performers this past month 
  • Nations seeking energy security are planning to expand their nuclear power capacity 

ASX uranium shares have been getting plenty of investor attention recently.

That’s because leading uranium companies have been massively outperforming the benchmarks.

Over the past month, for example the S&P/ASX 200 Index (ASX: XJO) is up 5.2% and the S&P/ASX 200 Energy Index (ASX: XEJ) has gained 6.6%.

Certainly not a shabby month’s performance.

But check out the returns from these 3 ASX uranium shares.

ASX uranium shares charging higher

The Boss Energy Ltd (ASX: BOE) is up 13.6% since this time last month. That gives the company a current market cap of $945 million. Boss Energy shares are now up 152% over the past 12 months.

Rival ASX uranium share Paladin Energy Ltd (ASX: PDN) is also enjoying a stellar month, with the share price up 16.9%. Paladin has a market cap of $2.7 billion and has gained 135% over the past full year.

And the third booming uranium company is Deep Yellow Limited (ASX: DYL). With a current market cap of $436 million, Deep Yellow shares are up 18.4% over the last month and 76% since 14 April 2021.

What’s driving investor interest?

Atop some likely tailwinds from momentum investors, ASX uranium shares are the clear beneficiaries of rising energy costs.

It’s not just oil, gas and coal trading at multi-year highs.

According to data from Trading Economics, the price of uranium is up 1.2% over the past 24 hours to US$64.50 a pound. That puts uranium prices up more than 113% over the past year and at the highest levels since Japan’s post-earthquake Fukushima nuclear disaster in 2011.

And many analysts believe uranium prices are likely to remain elevated.

As The Australian reports, Canaccord Genuity says that the world moving away from sourcing Russian energy supplies will also aid uranium. “Yes, this will mean more liquefied natural gas, but in our view, it will also lead to more nuclear in the longer-term mix,” Canaccord stated.

According to Minelife director Gavin Wendt:

Energy security is the driving force, with Japan indicating that it is looking at reactivating plants shuttered since Fukushima, France committing to six new plants over the next decade, and Germany suggesting a delayed closing of its plants.

Uranium I believe could be an outperformer, because for several modern industrialised economies, like Japan, Germany and France, it will be a relatively easy go-to means of ensuring energy security, and reducing exposure to elevated fossil fuel prices, while still maintaining green credentials.

Judging by the recent performance of ASX uranium shares, a lot of investors seem to have a similar outlook.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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