The ASX shares with 30% to 50% upside: fundie

One expert is predicting a big recovery for this ASX sector.

Key points
  • Energy, mining, and commodities expert Ben Cleary says ASX uranium shares are "down materially" in 2022 
  • He predicts this trend is likely to reverse course soon, resulting in a 30% to 50% upside for shares in the sector 
  • Cleary says Boss Energy is his pick of the uranium stocks

ASX uranium shares are "down materially and have completely decoupled with the other energy groups for no really good reason at all", according to energy, mining, and commodities expert Ben Cleary.

Cleary is the portfolio manager of listed investment company (LIC) Tribeca Global Natural Resources Ltd (ASX: TGF).

In an interview with Livewire, Cleary said he was "very bullish" on uranium shares. 

A man sitting at his dining table looks at his laptop and ponders the share price.

Image source: Getty Images

What's happening with ASX uranium shares?

Cleary said uranium shares have lost value recently but are well-positioned for a big future. This is especially because several governments have recently approved the commodity for energy generation.

Cleary said:

Uranium correlates very well with other energy commodities, whether it's gas or coal or oil — as it should do because it's obviously competing as an alternative energy source. 

However, year to date, uranium equities are down materially and have completely decoupled with the other energy groups for no really good reason at all.

In fact, they've been correlating more with cryptocurrencies and digital assets, for whatever reason.

Cleary expects to see this trend rapidly reverse course in the next few months. As a result, he reckons most ASX shares in the uranium space have a 30% to 50% upside from here.

He added:

The European Union has just approved uranium as an approved energy source. The American government are very supportive of nuclear generation. So is China. 

So uranium has a really strong governmental backing as a baseload energy source given it produces lower carbon emissions versus other fossil fuels going forward.

Uranium shares have declined in 2022 due to rising concerns about recession, as well as China's strict COVID-19 policy.

Which ASX uranium share is a buy?

Cleary's pick of the bunch is Boss Energy Ltd (ASX: BOE).

Boss Energy is one of the larger ASX shares in the uranium sector with a market capitalisation of $853.24 million. It holds interests in the Honeymoon uranium project in South Australia. It also holds interests in nickel-copper exploration projects in Scandinavia as well as gold interests in Burkina Faso.

The Boss Energy share price is up 1,300% over the past 12 months (yep, you read that right). But in the year to date (ytd), it has declined by 2%.

Here is a summary of the performance of the other big players in the uranium space:

  • The Paladin Energy Ltd (ASX: PDN) share price is up 44% over 12 months and down 21% ytd
  • The Energy Resources of Australia Limited (ASX: ERA) share price is down 4% over 12 months and down 29% ytd
  • The Silex Systems Ltd (ASX: SLX) share price is up 243% over 12 months and up 143% ytd
  • The Bannerman Energy Ltd (ASX: BMN) share price is up 33% over 12 months and down 27% ytd
  • The Deep Yellow Limited (ASX: DYL) share price is up 10% over 12 months and down 18% ytd

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. 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 Scott Phillips.

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