Investment trust insider on 2021’s winners – James Carthew: Three 2020 trust winners I like for 2022
The past 12 months may have been eventful, but they have also produced some impressive share price gains for many investment companies.
Top of the list is the uranium-focused Geiger Counter (GCL) which has produced a stunning 197% total shareholder return over the past 12 months. I wrote about the investment company in August 2020 when I said that the growing demand for uranium was not being met by new supply. This has bolstered the uranium price and GCL’s portfolio. The discount has been eliminated and the shares have moved to trade on an 18% premium. That means what was a Jersey minnow with a market value of just £16m is now almost four times larger.
Today, on the demand side of the equation, we have new power stations planned for China, India, Russia and the Middle East; about-turns in plans to shrink capacity in countries such as France, South Korea and Taiwan; the reopening of Japanese plants; and US plans for small modular reactors. In addition, trusts backed by physical uranium, such as the Sprott Physical Uranium Trust and Yellowcake (YCA) have been expanding.
On the supply side, after years of curtailing production, Kazatomprom, the largest global producer, has just announced plans to develop new capacity within its Budenovskoye joint venture. However, this wouldn’t be producing meaningful volumes of ore until 2024 at the earliest. Covid-19 constrained output last year and there is a risk that omicron could have an effect as we head into 2022. Cameco, which has suspended mining at its McArthur River project, has not yet said if it will resume production, and even when it does it will take many months to ramp up.
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