Why Centrus Energy Stock Popped Today

Centrus Energy (NYSE: LEU) banal leapt 6.3% done noon ET Tuesday arsenic further details filtered retired regarding President Trump's "Project Vault."

As you whitethorn recall, archetypal reports connected Project Vault described it arsenic a $11.7 cardinal effort to amass a strategical reserve of rare-earth metals, inciting investors to scoop up shares of rare-earth mining companies specified arsenic USA Rare Earth (NASDAQ: USAR), which popped yesterday earlier dropping -- and present is going connected different teardrop of its own!

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Well, it present turns retired that rare-earths are lone the beginning. The President besides wants to bargain uranium.

Image source: Getty Images.

As CNBC clarifies this morning, "the Trump administration's Project Vault stockpile tin see immoderate of the much than 50 minerals listed arsenic captious by the Interior Department," including "rare earths, lithium, uranium and copper."

Or arsenic the President enactment it: "We're not conscionable doing definite minerals and uncommon earths. We're doing everything."

The spot astir uranium is what's getting investors excited astir Centrus Energy today. As the starring campaigner to bring uranium enrichment backmost to the United States (and arsenic a institution that already does brisk concern buying and reselling uranium that was enriched elsewhere), Centrus would look admirably placed to payment from $11 billion-plus successful caller authorities spending to stockpile uranium and different "critical" metals.

And here's the thing: Even earlier Project Vault was announced, Centrus Energy banal was looking beauteous buyable. Priced astatine a seemingly affluent 43 times trailing earnings, Centrus generates substantially much escaped currency travel ($146 million) than it reports arsenic nett income ($114 million).

The resulting 33x price-to-free currency travel ratio is inactive pricey, but successful a satellite of overpriced uranium stocks, Centrus Energy is arguably the slightest overvalued mode to put successful atomic vigor today.

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