Why Centrus Energy Stock Raced Nearly 9% Higher Today

Wednesday was a good day to be an investor in either nuclear stocks or the suppliers that provide fuel for them. Happily for Centrus Energy (NYSEMKT: LEU), it covers both these bases.

On the back of news that a peer has secured an important new government contract, investors piled into Centrus stock and pushed it to a nearly 9% gain in price on Wednesday. That was a far better performance than that of the S&P 500 index, which sagged by 0.3%.

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It's good to have the right partner

The peer in question was ambitious next-generation nuclear energy start-up Oklo.

Image source: Getty Images.

It looks as if the company will be moving out of the start-up stage before long, as it secured what's called a notice of intent to award (NOITA) for an Air Force base in Alaska. Under the terms of the deal, Oklo will construct and run a nuclear generating plant supplying heat and electricity to Eielson Air Force base.

Centrus and Oklo are business partners, as they have a memorandum of understanding (MOU) for the former to supply high-assay low-enriched uranium (HALEU; a type of fuel) for Oklo's Aurora reactors. The Eielson project, therefore, is sure to include Centrus.

Major morale booster

While Oklo is a more direct beneficiary of the project, it is sure to produce reliable long-term work at the base. Given that, it will certainly provide Centrus with years of steady and reliable business. On top of that, the Air Force project also reinforces the viability of cutting-edge nuclear projects and the companies behind them -- and both Centrus and Oklo are prominent members of this club.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.