The Best Way to Invest Across the Entire Nuclear Industry with One Stock

In 1954, the U.S. launched a super-secret new weapon

The technology came from the Manhattan project…but this wasn’t a bomb.

It was a step-change in submarine warfare and featured a power plant worthy of the best science-fiction story.

In the wake of the U.S.S.R. launching Sputnik, the U.S. responded by sending a submarine under the ice across the north pole. It was a radical achievement for the time.

This month, we’re going to break down one of the principal companies that helped the U.S. create the world’s first nuclear submarine.

But first, a little history…

Admiral Hyman Rickover led the team that conceived and built the U.S.S. Nautilus. It incorporated a revolutionary micro-nuclear reactor to power the submarine’s propulsion system.

The Nautilus set the record for the longest submerged cruise on its first trial – 1,381 miles in 89.8 hours. That was also the fastest speed recorded by any submarine submerged for more than an hour.

It changed the entire military doctrine for naval warfare. The Navy studies the Nautilus against its existing World War II anti-submarine practice. The study showed that Nautilus was untouchable by the tools of the day.

However, it wasn’t until 1958 that the submarine showed what a game changer it was.

On August 3, 1958, with its identifying numbers painted over, the submarine headed for the Arctic Ocean. It remained submerged from Point Barrow, Alaska for 1,000 miles under the Arctic icecap to reach the North Pole.

It completed its run from the Pacific Ocean to the Atlantic Ocean in Iceland. It was a feat of engineering that would last for decades. However, the Nautilus herself was an engineering marvel.

And this month, we feature the company that played an integral role in her development.

The Ultimate “Picks and Shovels” Stock in the Nuclear Sector

This month, we’re going to do a deep dive into a company steeped in the history of nuclear energy in the U.S. BWX Technologies (NYSE: BWXT).

This $9 billion market cap company is a fixture in the nuclear energy space.

The company’s roots go back to the 1850’s, when Stephen Wilcox patented the water tube boiler.

Then, in 1867 he co-founded Babcock & Wilcox to market the technology. Thomas Edison once declared that the B&W boiler,

“…is the best boiler god has permitted man yet to make.”

Edison used the boilers to power his Pearl Street Station in New York City. It was the start of the “public utility” model. And it kicked off the age of electricity for lighting, transportation, and industry, according to the company.

Today BWXT works with the government in many aspects of the industry. It’s also one that few investors know about. As we researched the company, they seemed to be at every critical milestone, like Forest Gump of the nuclear industry.

Its work underpins some of the greatest events in energy history, but they don’t get the headlines. Here are a few milestones:

• Patented the Water Tube boiler – a much safer alternative to boilers used at the time.
• World’s first installed utility boiler (1881)
• Made the boilers for New York’s first subway system (1902)
• Created the first pulverized coal power plant (1918)
• Designed and constructed the penstocks for the Hoover Dam (1930)
• Supplied parts, materials, and processes for the Manhattan Project (1943-1945)
• Designed and made components for U.S.S. Nautilus (1957)
• Helped construct the first peacetime nuclear power plant in the U.S. – the Shippingport Atomic Power Station (1956-1957)
• Supplied and designed the reactor for the first nuclear merchant ship, the N.S. Savannah (1959)

These are just a few. In the 1980’s the company decommissioned and decontaminated the first commercial plutonium lab in the U.S. And that kick started an entire division that works on nuclear waste sites.

In 2011, the company consulted on the cleanup at the Fukushima Daiichi Power Plant after the earthquake/tsunami struck the complex. That was one of the worst nuclear disasters in history.

BWXT’s Current Businesses Live Up to its History

The company continues to innovate in the nuclear power space today.

In 2009, it began to develop small modular nuclear reactors for public power plants. That business is one of the reasons we are interested, as investors.

SMRs are the future of nuclear power.

However, BWXT is the ultimate “picks and shovels” company for the nuclear sector.

It works in everything from nuclear powered space flight, medical isotopes, advanced fuel sources, and nuclear waste cleanup.

The company generates about 13% of operating income from its revenue as you can see below:

In March 2024, a company-led group won a $45 billion environmental management contract for the Department of Energy’s Hanford site. It’s a huge deal and it had a material impact on the company’s stock, as you can see:

Here’s what CEO Rex Geveden had to say:

“This is an important award for BWXT and represents a significant objective as we continue to leverage our technical capabilities on high-consequence environmental restoration sites. We are dedicated to supporting the U.S. Department of Energy’s environmental stewardship at this site, as well as national security and cleanup work for DOE sites across the nation.”

This is just the latest announcement of a series of highly impactful awards in the last year.

February 2024: awarded $122 million contract for uranium “downblending” services. This program takes highly enriched uranium and blends it with material to make low enriched uranium fuel. This is a contract extension.

November 2023: Expanded collaboration with Fusion Pharmaceuticals to supply actinium-225. Fusion uses isotopes for targeted alpha therapies to treat cancers.

November 2023: Selected as nuclear fuel and component manufacturer for Air Force Research Laboratory’s JETSON program. The group (including Lockheed Marting and Space Nuclear Power Corp.) will make and test nuclear fuels and components.

October 2023: Awarded a $300 million contract by U.S. Naval Nuclear Propulsion Program for manufacturing nuclear fuel for the Navy.

August 2023: Awarded a $116.5 million contract to process government-owned scrap enriched uranium. The waste is currently unusable but could produce more than two metric tons of feedstock called “High Assay Low Enriched Uranium” (HALEU) fuel.

Another interesting award, from September 2023, came from the Wyoming Energy Authority to evaluate microreactor use in the state. The first phase of the project is to examine the potential uses of the microreactors. The second phase will be to design the microreactors for the identified purpose.

This is significant because Wyoming is a major coal producer. The state of Wyoming made a serious inquiry into small-scale nuclear power. That indicates a major change in the energy landscape in the U.S.

As you can see from these awards, BWXT operates in all segments of the nuclear industry. And that’s a good thing. As we saw with Wyoming, there’s a notable change in the attitude towards nuclear power. And small, modular reactors.

With BWXT, we can participate in the whole suite of the nuclear power industry.

Action to Take: Buy BWX Technologies (NYSE: BWXT) up to $100 per share. Be patient. Use a limit order and let the stock come to you. We should use a 25% trailing stop on our position. So, if the stock falls below $75 per share, we will sell.

We see nuclear power as a fantastic sector to invest in over the next few years. There are huge areas of growth potential, from nuclear medicine, specialized fuels, waste cleanup, and small modular reactors.

BWXT gives us exposure to all of them.

For the Good,

The Mangrove Investor Team