President Trump wants to kick-start nu plant construction in the U. It might not be as easy as it seems. Centrus Energy (LEU -7. 79%) stock tumbled 8. 1% through 11:45 a.
ET Tuesday after The Wall Street Journal warned investors that President Trump's plan to kick-start a nu power renaissance in America "won't be easy. " Image source: Getty Images. What does Centrus do.
Centrus is today bably best known as one of a handful of nu stocks aiming to restart uranium enrichment for use as fuel in nu power plants in the U.
The company already sells enriched uranium to power plants in the U. , of course, but primarily in the capacity of a broker, buying uranium from foreign suppliers and reselling it in the U.
Both parts of the, therefore, depend on growing demand for nu power -- from a growing number of nu power plants operating in the U.
According to the Journal, though, "Most current efforts [to grow nu power supply] are aimed at extending the operating licenses of existing reactors or trying to restart a handful of recently closed reactors.
" That's more ly to maintain existing levels of uranium demand than grow it.
And as for sparking a "nu renaissance," the Journal points out that this has been predicted multiple times in the past, but "didn't pan out. " Is Centrus stock a sell. Will this time be different.
But with new nu plants still costing $30 billion and up to get apved and built, something big needs to change for Centrus to justify its stock valuation, which is currently 55 times next year's expected earnings.
Despite all the hype, and despite (or because of) its stock price quadrupling over the past year, Centrus remains a speculative investment. Caveat investor.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.