Investors that have been buying ASX uranium shares, like Paladin Energy Ltd (ASX: PDN), have had quite a journey over 2024 to date.
Uranium stocks started the year on a high following the incredible gains of 2023. For most of the first half of 2024, those gains continued. But more recent months have brought less prosperity.
Take leading uranium stock Paladin. It's seen its value decline by more than 54% since May. Check it out for yourself below:
Peninsula Energy Ltd (ASX: PEN) has fared similarly. It's down a whopping 60% or so since its last peak earlier this year.
Much of the misfortune that ASX uranium shares like Paladin and Peninsula have endured this year can be attributed to the falling price of uranium itself. After a blowout year in 2023, uranium prices have come back down to earth in recent months.
As my Fool colleague Bernd covered late last month, uranium was US$94 per pound in May but had tanked to US$78 per pound by late November.
Many investors clearly took note of this, judging by what has happened with the prices of uranium shares like Paladin and Peninsula.
But other investors, perhaps of the value persuasion, might be considering these stocks as a buying opportunity right now.
ASX expert names uranium shares like Paladin as a buy
One of these investors is Monash Investors. This fund manager discussed its confidence in both Paladin and Peninsula in a recent update for its Monash Investors Small Companies Fund. This fund currently owns both of these ASX uranium shares in its portfolio.
Monash views both companies' recent share price performances as "market overreactions" related to both falling uranium prices and "production ramping projects". The fundie has recently added to both positions, taking advantage of their lower share prices. Here's some more of what Monash had to say about its confidence in uranium as a commodity and, by extension, these stocks:
The pair of negative updates, and what we believe to be market overreactions for both are in the context of no change to our assessment of the long-term importance of and potential for uranium itself.
Uranium demand is set to grow dramatically in the years ahead as nuclear grows in importance toward solving the globe's clean energy problems. And while supply can ultimately match this demand, the incentive pricing to bring that supply on is supportive of a strong long-term outlook for the price of uranium… we have been well-placed to capitalise on – as noted – what we believe are market overreactions.
Investors in ASX uranium shares like Paladin and Peninsula Energy will no doubt find this view reassuring as we wind down 2024. But let's see what happens next year.
