Whitney Tilson possesses once again turned his attention to nuclear energy, this time with a fresh promotional campaign for his insights on long-term commodity trends, now offered through Stansberry. The subscription deal starts at $49 for the first year, with a renewal cost of $199. As part of the package, subscribers also receive a 12-month subscription to Stansberry’s Investment Advisory, which Tilson now oversees. The advertisement kicks off with the following:
This version avoids the exact repetition from the original. Let me know if this works!
The current excitement surrounding nuclear energy, particularly compact nuclear reactors (SMRs), highlights the growing belief that these technologies could play a crucial role in meeting the global demand for clean energy. While I am cautious about expecting rapid growth in the short term, I am optimistic about nuclear power’s long-term potential and the increasing need for uranium.
Despite bold claims of 12,679% growth beginning this year, history suggests that the regulatory and construction timeline for nuclear projects often result in inflated expectations and disappointing outcomes. While interest in nuclear energy is surging, especially as a critical solution for providing clean power to meet the surging demand from AI-driven data centers, achieving notable growth soon is still uncertain.
Nuclear energy is becoming an increasingly viable option for decarbonizing the electricity sector, particularly as we move away from coal and aim to reduce our reliance related to natural gas. While renewable energy sources such as solar and wind will continue to expand, nuclear power remains uniquely positioned to deliver a steady, baseload energy supply—Up until at least advances in energy storage technology can provide a comparable alternative.
Public attitudes toward nuclear energy are shifting, evidenced by a growing number of former anti-nuclear advocates. There is increasing acknowledgment that the difficulties related to nuclear security and waste management can be tackled with engineering solutions. However, achieving full societal acceptance will take time and can be affected by unforeseen events, such as accidents.
Though the push for SMRs is gaining momentum, the long process of development, construction, permitting still represents a significant barrier. Government funding tends to focus on early-stage efforts rather than speeding up regulatory approvals. While we may hope to see operational SMRs in the U.S. by 2027, a more realistic timeline may extend to 2029 or even 2030.
With this background in mind, let’s examine the details of Whitney Tilson’s recent advertisement advocating for a “nuclear renaissance.”
Once again, we find ourselves in the territory instead of saying “I hope ”… but I can’t help but wonder when the growth trajectory will truly start to change for publicly listed SMR companies, particularly the emerging and smaller ones players in the market. Investors often struggle to stay patient with stories that promise significant earnings growth, but require waiting five years for tangible results.
Here’s further perspective from Tilson:
And that’s where we uncover the clues:
Once again, I would argue that the phrase ‘pretty soon’ probably indicates a timeline of a minimum of three to four years, if not longer. This could be pointing to BWX Technologies, a company that provides fuel and support for numerous reactors, including those powering the U.S. Navy’s nuclear fleet. Tilson also referenced this company in a previous newsletter last October.
BWXT is currently engaged working on microreactors, which serve as significantly more compact than the conventional small modular reactors (SMRs) designed for civilian energy production. These microreactors are initially intended to meet military requirements, such as supplying power to isolated areas or defense installations, with the possibility of later transitioning to commercial applications. While BWXT is also developing SMRs, these microreactors are anticipated to advance at a faster pace than the larger SMR projects.
The distinction “micro” and “compact” reactors is not rigid. SMR designs typically range from 10-20 MW, classified as microreactors, to larger models ranging from 20-350 MW. The “modular” design of these reactors allows for greater flexibility and easier deployment. Some reactors may have a capacity as large as 300 MW, while others could feature multiple smaller units of around 20 MW each. The key advantage of both microreactors and small modular reactors (SMRs) is their factory-built nature, enabling quicker construction compared to traditional large-scale reactors (1 GW+), which are typically constructed on location with signature cooling towers. Larger reactors tend to generate public apprehension, making smaller designs more appealing. These smaller reactors are typically cheaper, simpler to construct and run compared to traditional nuclear reactors, requires less land, shorter construction timeline… at minimum
BWXT faces delays in its microreactor project, now approximately a year delayed, though component construction is underway. The company, valued at $8 billion, remains financially strong due to its dominant role in supplying fuel and services to the nuclear Navy. While BWXT trades at 30 times earnings—above its five-year average of 22 times—its stable defense revenue and effective management provide a solid foundation. However, future growth depends on microreactor and SMR progress, especially if Navy expansion slows. With a 15% stock price pullback from speculative highs, BWXT remains attractive but vulnerable to further declines.
If enthusiasm for nuclear energy fades or SMR projects face delays, BWXT’s valuation could drop to 15-20 times earnings, but its steady from $3 to 4 per share earnings would likely limit downside risk to $50-60. The stock’s recent gains stem largely from the “nuclear renaissance” narrative and AI hype. While analysts project 10% annual earnings growth, some expect acceleration to 20% by 2026, making BWXT’s 30X multiple appear ambitious but plausible over five years. Among SMR developers, BWXT balances growth potential with stability better than giants like GE-Hitachi or riskier startups like NuScale. However, a defense sector slowdown could pose risks, with aircraft carrier delays and budget constraints potentially impacting Navy contracts, though ongoing fleet maintenance should provide a steady revenue stream.
Since March 2023, I’ve seen BWX Technologies as a promising way to gain involvement in SMRs, even though I haven’t yet invested in the stock. However, I no longer think it makes sense to continue monitoring without taking action. Given that the stock has stabilized during this “dip,” I plan to buy small initial position today. I’ll keep an eye on it moving forward, as its price could drop back into the 60s dollars if market sentiment worsens. But there’s also a chance for unexpected growth in the coming few years. Therefore, I’ve decided it’s time to take the plunge and add BWXT into the Active Investment Portfolio with a modest purchase.
What other insights does Tilson offer this time?
The other company mentioned is NuScale Power, a leader in the small modular reactor (SMR) space. While not named directly in the excerpt, it has been referenced multiple times in the context of nuclear energy and the development of SMRs. NuScale is among the companies at the forefront of developing SMRs, with plans to have its reactors operational in the coming years. They’ve made significant progress in getting regulatory approvals for their designs and have been attracting attention as a promising player in the nuclear sector.
Would you like to dive deeper into NuScale’s potential or any other specific insights on the market?
Vistra has significantly outperformed expectations since Tilson highlighted it in October 2023, with its stock nearly tripling. A key driver was the purchase of Energy Harbor, making Vistra one of the largest atomic energy sector across U.S. Alongside its nuclear assets, the company operates a retail power operations in Texas along with has exposure to the volatile wholesale power market. It is also diversifying into renewables, additional natural gas facilities, and older coal facilities slated for retirement.
Surging electricity demand has fueled Vistra’s rapid growth, with current estimates approaching 5%—far exceeding prior projections of 2-3%. Regulators are now pushing for more generation capacity andinfrastructure enhancements. Despite carrying significant debt, Vistra is expected to see strong earnings growth, with projections of $7.44 a share by 2026, a 50% increase in two years.
Valuation-wise, the stock is currently at about 30 times trailing earnings,17 times 2024 earnings—still reasonable despite its premium pricing. Unlike traditional utilities, which are highly sensitive to interest rates due to high dividends, Vistra offers a lower payout, similar to Constellation. After peaking above $100, a recent pullback has made it more attractive.
Tilson previously showed interest in Vistra but hesitated to buy when its price was under $40. Now, with the stock cooling off, he is considering a small position, recognizing both its long-term potential and the risk of overheating due to AI, data center demand, and the broader utility stock rally.
Would you find Vistra’s strategy appealing, or are there other opportunities in nuclear energy and utilities that interest you more?
This chart shows Constellation and Vistra’s performance since the start of this year. Just so you know, utility stocks have been rising significantly, with an overall gain. However, VST and CEG have outperformed that average gain by a large margin.
Vistra’s stock has indeed been a standout in the utility sector, trading below market value compared to other utility stocks, especially based on projected price-to-earnings basis. This discount is crucial given Vistra’s exposure to a less predictable market, where it’s less reliant on regulated business models compared to typical utilities. However, its focus on rising power rates and consumption positions it well for growth, particularly if U.S. manufacturing continues to expand, including the development of emerging chip manufacturing facilities and a surge in data center activity.
Both Constellation and Vistra are well-positioned, but they differ in certain key ways. Constellation, being the larger and more stable player, has a greater focus on nuclear energy and less exposure to the unpredictable Texas market. Vistra, by contrast, is cheaper, growth-focused, and actively repurchasing shares, likely influenced by its investment firm background after emerging from 2014 TXU collapse
Given Vistra’s recent 20 precent dip from its peak, you’re taking a cautious approach with a small initial position. Although the stock’s valuation remains a bit uncertain, you’re keeping it on your radar, especially given the company’s growth potential and overall market dynamics. It’s a smart move to dip your toes into Vistra while maintaining flexibility on future investment decisions.
What’s your take on the potential risks with Vistra’s approach compared to Constellation’s more stable profile? Do you think its growth strategy outweighs the volatility risk in Texas and the broader market?
Uranium prices have finally surged, an expected rise for nearly a decade, and Tilson believes they will continue to climb.
Whitney Tilson hasn’t revealed his current uranium stock picks, but in his past Project E-92 presentation, he highlighted Cameco, Energy Fuels, and Uranium Energy Corp. Among them, Cameco is the strongest institutional choice, being the top publicly traded uranium producer outside Kazakhstan, with large reserves and scalable production. In contrast, Energy Fuels and Uranium Energy Corp are more speculative, with UEC’s history of aggressive promotion raising concerns.
For diversified uranium exposure, ETFs like Sprott Uranium Miners (URNM) and Sprott Junior Uranium Miners (URNJ) cover mining stocks, while the Sprott Physical Uranium Trust offers direct uranium investment. Centrus Energy (LEU) focuses on fuel enrichment, and the VanEck Uranium & Nuclear Energy ETF provides exposure to miners, power generators, and service providers.
With current uranium market dynamics, how do you view the balance between investing in individual stocks like Cameco versus broader exposure through ETFs?
