Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Cameco Uranium Miner Worth Another Look

Commodities / Uranium Apr 12, 2012 - 06:59 AM GMT

By: Bob_Kirtley

Commodities

Cameco 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. 

Twelve months on, the fallout from the Fukushima disaster (nuclear and financial) has subsided and the uranium sector has started to see some positive signs once again. The number of reactors globally is expected to increase in coming years, and Japan is even seriously considering reopening some if not all of its reactors.


Since our last update Cameco has consolidated further and the technicals are in favour of a buy – of note is the tantalizingly low RSI at 23.8.

Intuitively the fortunes of Cameco are directly tied to the price of uranium and this remains their biggest determinant of profitability. Over the last 20 years, reactors have consumed far more uranium than what was produced each year by mines. The shortfall was made up by inventories and secondary supplies that are being drawn down. Global demand for uranium is expected to rise 3% annually until 2019, driving the need for increases in supply.

There are concerns surrounding Japan’s next action. If their plants re-open, demand for uranium picks up. What is of greater concern is the plants do not open, and Japan decides to pursue alternative forms of energy, then we face the possibility of their uranium reserves being sold to the detriment of mining companies.

Other large player in this market is China, where there are 27 nuclear reactors under construction, 11 of which will be completed in the next 3 years. China’s nuclear capacity is expected to rise by a factor of nearly 8, before 2020 – if this were to occur China would produce almost as much nuclear energy as the United States (currently the largest producer) does now.

India is also expanding their nuclear energy base with 7 reactors currently under construction. Provided the US-India Civil Nuclear Agreement is passed, capacity is expected to skyrocket 9 fold by 2020 to a level around half that of China’s 2020 forecast.

Cameco has a market capitalization of $7.8 billion, a 52 week low of $16.59 and a high of $31.25. Average volume of shares traded is 2.9 million, and being the world’s largest uranium company, liquidity is of no concern.

The 2012 first quarter results will be released on the 1st of May. The average analyst estimate of EPS for the quarter is $0.27. Generally when earnings fail to meet the general consensus, stocks sell off. Considering the average quarterly EPS last year was $0.28 (1 cent higher than what is forecast for this coming quarter), the forecast for the first quarter could be considered achievable and hence the probability of not meeting the forecast is low.

We see Cameco’s growth opportunities as very healthy. With a current PE ratio of 18, if forecast growth in the nuclear energy sector is realized, then a significant capital gain is likely. For those interested in profiting from a short term bounce, a few well thought out options could be the way to trade this stock

Apart from holding the physical metal and our core position in the mining sector, our forays into the options market has generated some good returns for us, but you do need a cast iron stomach and the ability to sleep easily despite the precarious state of the financial markets.

For now we will hold fast and continue to look for absolute bargains and we will try to be patient enough to wait until whats on offer is the real deal.

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

© 2005-2018 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

6 Critical Money Making Rules