Investment Objective The Sprott Physical Uranium Trust invests and holds substantially all of its assets in uranium in the form of U3O8. Goal Provide a secure, convenient and exchange-traded investment alternative for investors interested in holding uranium. Natively trades on TSX as U.UN in $CAD NAV of fund = pound of U308 held x current spot price
SRUUF is a great trading vehicle, if your hold timelines are patient and flexible. SRUUF accurately tracks the spot price, however there are shenanigans that lead to periodic 10-20% NAV discounts. This is when you load up. Wait for discount to hit double digits then watch it closely for volume spikes, those are almost always institutions gobbling it up at a sale price. Then when it reverts to NAV, sell, unless spot price is active and uptrending. The bullish thesis for spot price is that the market has been undersupplied for years, and secondary supply is being exhausted as a super-cycle of new contracts are being executed. Utilities need to contract min 3-5 years out. The supply coming online in next few years will not service demand adequately. Think gas price spike. Also, miners and enrichers have already spun down all their spent tailings in centrifuges to generate the secondary supply. Historically they could leave those tailings in a pile and then use them as secondary supply when/as needed. No longer is that much of an option for many companies. New mines are coming online slowly. There is a high probability of a spot price double or better in the coming five years. When SRUUF increased to more than a 1% premium over NAV, Sprott issues new shares to sell it down to NAV +1% (their approx annual fees). This is how they raise cash for additional purposes. So it isn't as painful as straight dilution, and is your cue to unload your green shares. This is a fairly easy playbook except for your time horizons, so it isn't for everyone, but if you always have spare cash this is a great buy at 12-20% NAV discount. I have traded six round trips in the last 12 months, all profitable, all singles and doubles no home runs. I am overallocated now as it's around a 12-14% discount.
Not sure if anyone ever looked into this. Spot Uranium has not been trading for weeks, since nobody is willing to let it go at the existing spot ask. SRUUF drifted down from its NAV as follows: That 15.21% NAV discount is a straight up gift for anyone who believes uranium isn't going to dump (outside of a DPRK nuke, major accident, etc) any time soon. If you can park cash there, it's about as easy money as you can find. I sold into today's surge for 8% gains, and am holding a core position from 10.77. To today's NAV that's a 20% gain if I can sit tight and wait for it. Also NAV and share price are likely to be higher by the time they converge, there are no willing sellers in spot market. I will reload under 11.50 if possible. I started loading this round at 11.17, and was buying hand over fist in 10.70s as the discount at that time was about 12-14% and it lagged for a few weeks after that (mid-March buys). I encourage anyone who can park their cash in holdings and be patient for a few weeks to up to 3-4 months to go after this one. They'll be uplisted eventually, when covered calls will make this play a golden goose.
