Investing

Is now the time to invest in uranium stocks?

  • Last Updated:
  • Nov 9th, 2017 11:09 am
Sr. Member
Sep 24, 2006
783 posts
27 upvotes
catoun wrote:
Sep 18th, 2017 12:55 am
Still in accumulation phase in my opinion.
While Friday's volume was high, the price reversal wasn't strong. That would indicate that supply still exceeds demand.
I would prefer to wait for a retest and a break of the support @ $11.6, and see if that triggers a bullish signal.
this is the equivalent of hot deal 90% off, should be in the hot deals section maybe even freebie section

http://charts.equityclock.com/cameco-co ... onal-chart


http://charts.equityclock.com/cameco-co ... onal-chart
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Deal Addict
Sep 2, 2004
1758 posts
83 upvotes
I started a small position in cameco today. No plans to add to it at this poiny, but if it becomes an even more compelling value I might.

Oh and thanks for posting the links and chart above.
Sr. Member
Sep 24, 2006
783 posts
27 upvotes
Capt. wrote:
Sep 25th, 2017 5:16 pm
I started a small position in cameco today. No plans to add to it at this poiny, but if it becomes an even more compelling value I might.

Oh and thanks for posting the links and chart above.
yep it's gonna be scary but I think anyone getting Cameco at this point is getting the Walmart of uranium for 60-70% off and any investment most important thing is the price you buy at, second timing and I think you got both on our side this time.
Newbie
Apr 23, 2017
92 posts
41 upvotes
What's so great about CCO? They're losing money and their market is oversupplied.
Deal Addict
User avatar
Feb 19, 2014
1285 posts
306 upvotes
Toronto
What percentage of your portfolio do you guys keep as cash, so when a good deal comes up, you can jump on it?

I'm trying to figure that out.

Right now I have about 20% of my portfolio in cash, just waiting for a downtrend on my current portfolio. Is that a good idea?
Member
Jun 28, 2016
207 posts
92 upvotes
staffpro wrote:
Sep 29th, 2017 10:26 am
yep it's gonna be scary but I think anyone getting Cameco at this point is getting the Walmart of uranium for 60-70% off and any investment most important thing is the price you buy at, second timing and I think you got both on our side this time.
I don't really understand how it's 60-70% off. The potential hit from the CRA lawsuit is enormous, and I am not that reassured by the US case going their way, as the US is not Canada. They also recently lost a huge contract in Japan (putting their future in uncertain litigation again) and there are worrisome noises coming out of major uranium consumers like France and South Korea about radically reducing their reliance on nuclear power. It's also currently losing money, and, more importantly, in my view, losing book value/share, as it's not losing money to grow or anything like that. It's just struggling to not lose too much money in a terrible market.

So, should it be trading above book value? I don't know. Certainly, if it rose above that level, I'd get a bit leery, and it's book value is only about $13.

There may be a good trading opportunity here (although I won't be entering unless it dips below $12) but I can't really consider Cameco a reasonable long-term vehicle for investing in rising uranium prices (I don't know how much they will rise, but $20.25/lb is definitely not the top) until its legal issues with the CRA are settled in 12-18 months.
Sr. Member
Sep 24, 2006
783 posts
27 upvotes
zinger9 wrote:
Sep 29th, 2017 10:38 am
What's so great about CCO? They're losing money and their market is oversupplied.
Well i don't really feel like arguing with anyone and you guys should do your own DD but... lets look at the positives...

the guy that heads the below firm (David B Iben) has 35 years of experience in deep value plays, has a history of picking successful value plays, Cameco is their largest holding. Before Kopernik he had a very successful run at Tradewinds LLC

http://kopernikglobal.com/sites/default ... 0Final.pdf

-along with positive seasonality - see my previous post
-they still pay (although this is not certain going forward) a dividend
-Litigation with TEPCO over cancelled contract will likely result in most of the value extraction out of those contracts, they have had cancellations like this before and they manage to extract most of the value historically.
-fundamentally the picture for uranium supply is improving albeit slowly
-demand is growing (5 years out +) large driver of that is india and china.
-although high initial capex costs - it is the CHEAPEST, CLEANEST, SAFEST, form of base-load power.
-japan IS restarting https://www.forbes.com/sites/kensilvers ... b8b00b30e8
-out of the top 10 invest-able uranium companies by market cap, this is probably the only name, maybe nexgen too... where an institutional investor can get in in size, it's the only publically traded producer with meaningful production - this is why i say you are getting a "walmart" of the sector. the sector is so small by capitlization that this is exactly what will cause the outsized moves when money goes back in... look at cameco in late 2016 in 3 months it doubled. What other sector do you get a large cap stock doubling in 3 months?
-the incentive price for new uranium supply is at least 50$/lbs. - how long did oil trade at 26$/barrel given an incentive price of $40-50/barrel... this is exactly what we rallied to in the oil market. Uranium market is no different except that for the convoluted/insanely regulated market everything happens way slower and often in spurts when the utilities rush to the market to secure supply for years at a time.
-lastly reprocessing (another source of supply) is reaching its point where it no longer makes sense the cost of a "SWU" or centrifuge unit is approaching/already has passed point where it no longer makes economical sense. Look into presentations press releases/financials of Urenco, one of the world's largest uranium enrichment firms for insight into that part of the market.
-lastly - the russian/kazakh "wildcard" in that currently HALF of global supply of u308 as well as the enrichment market is either russian firms or russian influenced countries like kazakhstan... who knows where the escalations/sanctions with russia will go given our currently messed up politically world.
-look in MDA for latter 2016/2017 the CRA issue is basically a non issue they have already set aside funds for it and are likely setting aside more than they need, if the ruling is less than the 2.3 billion CRA claims they are owed than it will be a positive catalyst. Also ask yourself when has CRA ever asked a firm to repay 2.3 billion in taxes... I can't think of an example, and given market cap i can't fathom CRA/government destroying one of the largest employers in Saskatchewan, and a former crown corp.

Negatives:
-"nuclear is dead" ... how are you going to charge your beloved tesla when the wind is not blowing or the sun is not shining
- they are "bleeding cash" - yes the dividend is a fairly stupid idea right now but if they cut it they would be cashflow positive every quarter, even paying the dividend they are still cash flow positive some quarters even in this absolute dog shit environment for the sector - this speaks to the quality of their 2 flagship assets (mcarthur, cigar) which on a cash cost basis still "make" money at current even SPOT price... but most of their contracts are in the 41$ range right now, some are rolling off in next 3-4 years. - this is another risk if the price doesn't recover.
-dividend payout is too high - already talked about above, go ahead cut it i don't care probably a good idea right now to conserve cash.
-apparenlty kazakhs are producing for <$8/lbs via ISR technique which is lower than Cameco's 9-12$ cash costs..... however even they are smartening up and establishing a Swiss marketing arm to market the uranium via long term contract rather than dumping to spot. Also Kazatoprom will be IPO'd some time in 2018 and it is in that countries best interest to make the price as high as possible sort of like Saudi Arabia is doing with Saudi Aramco IPO and trying to stifle the oil market higher.

Negatives or Positives
-4th gen nuclear reactors that don't actually generate waste as they re-use spent nuclear fuel - lower uranium demand as they use alot of the "waste" as well, however periodically they still require new uranium and maybe can repaint the "bleak" picture of storing the waste... although in reality this really isn't a problem as if you look at the "waste" generated by a large nuclear site in a year, although mildy radioactive it pales in comparision to the amount of waste/greenhouse gases/smog/pollution/ fatalities/health consequences generated by coal, LNG, oil fired power plants AND believe it or not safer than wind/solar and less pollution than solar (manufacturing of the panels is an insanely toxic process) (i'm not going to give links here if you want to delve into pandora's box the information is there)

I wrote this whole post under the influence of several glasses of wine so sorry if it lacks structure. And I welcome challenges to my thesis.
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Sr. Member
Sep 24, 2006
783 posts
27 upvotes
CCO still on sale before that magic Oct 5th date, not a sure thing but probabilities are pretty good >70%
Deal Addict
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Jul 22, 2004
1689 posts
35 upvotes
ETOBICOKE
Cameco getting beat down good today.
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Sr. Member
Sep 24, 2006
783 posts
27 upvotes
Blazin_Sunfire wrote:
Oct 3rd, 2017 11:10 am
Cameco getting beat down good today.
good day to buy some shares, that's why i always buy 1/4 at a time added 1/4 today very happy with price.

Scotia bank downgrade is funny though they are even more shill than goldman sachs, time and sales this morning drop was all Scotia as a buyer LMAO
Sr. Member
Sep 24, 2006
783 posts
27 upvotes
well maybe not shill i guess how their trading departments justify staying in business these days, saw arb opp today and bam collect shares and distribute all fall/winter long for a profit
Newbie
Dec 8, 2013
36 posts
6 upvotes
Bought 500 shares in my kids RESP. Could be forming a nice double bottom from a year ago, or fall off a cliff.
In 15 years it will be either: 'Great move Dad, its nice having money for beer and tuition' or 'you invested in Uranium? You out of touch geezer, why didn't you buy TSLA? Pass the spam.'
Sr. Member
Sep 24, 2006
783 posts
27 upvotes
bluebumbler wrote:
Oct 3rd, 2017 4:07 pm
Bought 500 shares in my kids RESP. Could be forming a nice double bottom from a year ago, or fall off a cliff.
In 15 years it will be either: 'Great move Dad, its nice having money for beer and tuition' or 'you invested in Uranium? You out of touch geezer, why didn't you buy TSLA? Pass the spam.'
yep i picked up some shares yesterday and today as well
Sr. Member
Sep 24, 2006
783 posts
27 upvotes
staffpro wrote:
Oct 6th, 2017 12:08 pm
https://www.forbes.com/sites/michaelkra ... c95512f901

I want to buy more but think i should hold off a few months till next buy, finger on the trigger
"Doubling the uranium price (say from $25 to $50 per lb U3O8) takes the fuel cost up from 0.50 to 0.62 US c/kWh, an increase of one quarter, and the expected cost of generation of the best US plants from 1.3 c/kWh to 1.42 c/kWh (an increase of almost 10%). So while there is some impact, it is minor, especially by comparison with the impact of gas prices on the economics of gas generating plants. In these, 90% of the marginal costs can be fuel. Only if uranium prices rise to above $100 per lb U3O8 ($260 /kgU), and stay there for a prolonged period (which seems very unlikely), will the impact on nuclear generating costs be considerable."

good read http://www.world-nuclear.org/informatio ... power.aspx

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