Tuesday, Sep 14th 2021

More uranium. This time, it's physical.

Investor Update

We're adding additional uranium exposure to Offshore

As we mentioned in our email to Titan clients last week, we continue to believe that robust global demand, an accelerating structural supply deficit, and its highly attractive value proposition make uranium an outstanding investment opportunity worthy of our clients' capital: one which we believe could yield 2-3x returns net of fees over the 3-5 year horizon, with minimal downside risk.

Additionally, we’ve seen one of the primary catalysts to our uranium thesis - the launch of Sprott's Physical Uranium Trust - already having a far greater impact on spot markets than we anticipated. To date, we have invested in what we believe to be the highest-quality uranium miners; however, given our strong conviction, we believe expressing our uranium thesis through exposure to physical uranium provides an equally attractive investment opportunity for our clients.

As a result, we have initiated a new position in North Shore Global Uranium Mining (URNM) in the Offshore portfolio.

How we're funding our investment in URNM

To fund our URNM investment for Titan's Offshore portfolio, we are exiting two of our existing Offshore holdings including Ferrari (RACE) and Nintendo (NTDOY).

Ferrari (RACE): Last week, we trimmed our exposure in Ferrari to fund our investment in Cameco Corporation (CCJ). Today, we sold the remainder of our position given the risk/reward skew we see with this compelling investment in physical uranium. We exited Ferrari after a +5% return since our original purchase in early April 2021.

Nintendo (NTDOY): While we remain bullish on the long-term growth of gaming, Nintendo has been a strong beneficiary of COVID-driven tailwinds over the past several months, and as a result, led to elevated growth expectations for the company. As such, we see increased risks for Nintendo sustaining this strong momentum over the near/medium term against the backdrop of increasing competitive pressures, lingering global semiconductor supply chain shortages, and moderating growth dynamics from continued global re-openings. Further, the company's delayed release of its highly anticipated Zelda Breath of the Wild and Switch Pro until FY2023 removes potential upside support for 2H21 results against these elevated expectations.

While we remain confident that Nintendo will perform well over the medium/long-term, we believe the risk/reward skew is more attractive in URNM from an opportunity cost perspective and decided to exit the NTDOY position at a -14% loss since our investment in early April 2021. This loss may help to offset other gains in clients’ portfolios from a tax perspective at the end of the year.

TLDR: We continue to love uranium, and we're delighted to be further invested in it. If you have any questions about these portfolio management decisions, please reach out to our team.

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