Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Cameco Corporation Stock Price Close to a Bottom

Companies / Uranium Oct 10, 2012 - 05:07 AM GMT

By: Bob_Kirtley

Companies Best Financial Markets Analysis ArticleCameco Corporation (CCJ) is one of the world’s largest uranium producers. It is also the world’s largest publicly traded uranium company. Cameco operates several mines across North America and one in Kazakhstan. 

Uranium continues to trade sideways to lower but long term prospects are starting to look very rosy.
 


The future of nuclear energy in Japan is very uncertain. The Japanese government last month agreed to end reliance on nuclear power by 2040 only to renege on that statement days later.

Only two of Japan’s 54 reactors are currently operational which is a worrying statistic for a uranium bug. However with the approval of safety officers, idle plants can be reopened at a moment’s notice so the future of nuclear power in the country is far from dead.

To fill the gap left by the nuclear shutdown, Japan is importing increasing amounts of fossil fuels. With almost zero natural energy resources Japan must import all their energy needs. They are the world’s biggest importers of coal and LNG and the second biggest importer of oil. This means their Co2 emissions are extremely high, compounded by the huge distance fossil fuels have to be shipped to reach the islands.

Japans reliance of fossil fuels is unsustainable and potentially politically unpopular. The cheapest, most simple solution is a return to nuclear energy. When will this occur, nobody knows, but their nuclear future is unlikely to be secured prior to the general election in a few months’ time. Memories will fade in time and although very serious, the consequences of Fukushima were limited. Managed well, Nuclear energy is safe and clean.

In a similar vein as Japan, Germany has chosen to totally phase out reliance on nuclear energy by 2022. Bulls - don’t panic just yet! There are some very positive emerging signs for Uranium.

Despite the (temporary?) decommissions in Japan and Germany, (Germany appears to be having second thoughts) we believe the broader long term picture for Uranium and associated stocks is very bright.

South Korea, India, China and Russia combined have 60 reactors under construction. So demand is there from other sources.

On the supply side, it’s only a matter of time before we see a serious crunch. Russia’s program of conversion of weapons grade uranium into fuel is set to end in 2013. This currently supplies around 16% of uranium demand each year. That is a big gap to fill and will ultimately result in a shortage – driving prices up. Something’s got to give, and uranium stocks may be close to making their bottoms.


Cameco has had a tough time of it following the 2011 Fukushima disaster, shedding over 50% of its value from its high earlier that year.

Notably, the last time we suggested Cameco was worth a short term buy the stock prices increased around 15% in the following month.

An indicator that has worked well over the past 12 months to signal a buy is the MACD.

The vertical lines on the chart above indicate a sub-zero MACD cross over (buy signal). This indicator has correctly picked the short term bottom with stunning regularity. The red vertical line is the only sub-zero cross over to send a false signal. With another crossover imminent, now looks to be a very good short term buying opportunity. There is strong support at $18 which we are not far from approaching, so we believe the downside is limited.

Cameco has a market capitalization of $7.7 billion, a 52 week low of $16.59 and a high of $26.45. Average volume of shares traded is 1.9 million, and being the world’s largest uranium company, liquidity is of no concern. It also pays a small dividend and has a reasonable P/E of 16.9 

Cameco’s revenue has remained relatively stable over the past couple years as it sells its products on long term contracts. Cameco’s high quality assets, continued expansion of production, and vast resources make it a very attractive buy at these levels.  

For disclosure purposes we currently have no position in Cameco.

Also note that Cameco will hold its third quarter conference call with the company’s senior executives on Thursday, November 1, 2012 at 1:00pm Eastern.

Have a good one.

Bob Kirtley
Email:bob@gold-prices.biz
URL: www.silver-prices.net
URL: www.skoptionstrading.com

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 200

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.

Bob Kirtley Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in