Is it worth keeping uranium of Uranium Energy in the portfolio?

Small-cap company Uranium Energy Corp. (UEC, AMEX) attracted attention in 2020 with rapid growth in quotations. The last week correction was considered by some investors as an entry opportunity. But how promising is the uranium production business today? Back in 2017, Ffin.ru talked about the bankruptcy of an American company that produced an equipment for Westinghouse nuclear power plant and the end of the era of nuclear energy. Nuclear power plants were originally used as a tool for the production of raw materials for nuclear weapon, which is now produced enough to destroy the planet many times over. Now there is only moderate demand for uranium. Nevertheless, it persists, as many nuclear power plants continue to be operated, and the fuel is purchased regardless of fluctuations in electricity prices, since the uranium is usually stored for two years, while nuclear fuel is needed in the reactors. This provides a stable market for companies like Uranium Energy, albeit with bearish long-term potential. However, the COVID-19 crisis has zinged up this market as roughly half of the uranium mining operations have been affected by the pandemic. As a result, production of 64.4 thousand tons of uranium concentrate for reactors is expected in 2020, while demand is estimated at 82.5 thousand tons. The deficit pushed prices higher: on May 11, uranium futures reached $ 33.45 per pound on the New York Mercantile Exchange, up about 34% since the beginning of the year. At the same time, crude oil futures fell 55% in the United States. Thus, the increase in the price of uranium led to an increase in quotations of Uranium Energy. Even with the announcement of a secondary public offering and an immediate 15% drop in quotes, UEC shares have gained 8.79% YTD to $ 1 in September 25 trading. The market capitalization is 178.45 million. The low share price of UEC and some positive dynamics could attract the attention of the investors. However, it should be noted that the deficit is most likely temporary, and uranium prices will decrease again in the future. At the same time, the long-term prospects for nuclear energy are the same: solar and wind energy is preferable for most companies, and this trend will continue.