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Cameco (CCO)

68K views 203 replies 47 participants last post by  james4beach 
#1 ·
The slaughter just seems to continue with uranium producers. Cameco is now at 19 and sporting a pedestrian PE of 17 with a dividend yield around 2%. It is almost looking like a value play now despite an earlier run at 45.

It is now actually close to its 2009 low.

I know some are really down on Uranium but Japan has only talked about moving away from Uranium - I don't know if they'll be able to do it. Germany has long-range plans about not pursuing more nuclear power plants but again it remains to be seen what they'll do. Meanwhile we know that India and China are continuing to build more plants. We also know that current uranium production is insufficient for existing uranium use with the gap filled from decommissioned nuclear arms warheads. However, those warheads are now also running out.

I think this is a good opportunity for a long-term contrarian bet but I would wait for a more solid bottom to form as these guys just continue to sink. Cameco is the strongest player in the field and they have the hedging programs in place to ride out any weakness in uranium spot prices. They also seem to be intent on trying to expand with the hostile takeover of Hathor. I also wonder if they make a play on Denison Mines with their stocks down about 75% from their yearly high and trading at 1.19 now.

I guess I'm ready to jump in once the knife stops falling. Are any of you guys about ready to wade in?
 
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#73 ·
1. everyone is turning away from nuclear
2. you might have to wait a long time for a rebound (if any)
1. Everyone? There are countries, that in fact, are pursuing expansions of their existing power plants & easy to guess what countries these are.

Visit the IAEA website.

2. And how much longer for the alternative energy technologies to start, 20/30/40 years?
 
#76 ·
Germany just using 3.2% of world nuclear by megawatt capacity . the biggest European user is France with 17% and I didn't read any rumors that France wants to stop using it. Nuclear share of France electricity production is above 77%.
The World Nuclear Association say that China, South Korea and India are pursuing ambitious expansions of their nuclear power capacities, with China aiming to increase capacity to at least 60 GWe by 2020, 200 GWe by 2030 and 400 GWe by 2050.South Korea, they say, is planning to expand its nuclear capacity from 20.7 GWe in 2012 to 27.3 GWe in 2020 and to 43 GWe by 2030. They say that India aims to have 20 GWe nuclear capacity by 2020 and 63 GWe by 2032
 
#78 ·
iN THE SAME ARTICLE "During a round-table with the parliamentarians, Proglio explained that power demand in France could increase by 40% by 2025 and this would automatically reduce nuclear power's share significantly."
So, if you do simple math , increase by 40% will bring down nuclear exactly to 50% without closing any reactors. :)
 
#85 ·
I have couple of thousand shares in CCO with average price slightly below $23.
Losing my pants on this one lol.
I still remember back in the days when CCO was around $40, I used to say this: "I only bought 500 shares of CCO at $25.xx, I wish the price of CCO would go back to $25 so I can accumulate more".
Thanks to that Japanese accident, the price did dip around $17.xx lol. I know I should be happy because now I can/have accumulated a lot of it to the point where I am now over weighted with heavy unrealized losses lol.
My conscious told me to feel happy, but my nature told me to feel the fear. So far conscious is winning because I continues to accumulate CCO at these prices lol.
 
#90 ·
Uranium: you make me giggle because you sound like me. :highly_amused: Although I do have more self-control with my weighting, LOL.

gibor: I think it's a painful position not because of the size, but because it pays no dividends. :biggrin:

thenegotiator: so many bargains; good opportunity to start and/or add to existing positions of some stocks, but don't tempt U101; he has enough with CCO. :hopelessness:
 
#100 ·
$105 million DB plan actuarial loss in 2012 Q3, to go with a $110 million DB plan actuarial loss in Q3 2011. Those are huge losses when you consider revenue in those quarters were $408 million and $527 million, respectively.

Does anyone know the status of their pension plans? Are these legacy plans that are hurting the company, or are they offering DB plans to new employees?
 
#101 ·
it bounced right off the lows.
just got home and saw the punishment.
all my uranium stocks are down .
some just a bit.
UUU held at 2.05 buy may go lower.
another falling knive.
i noticed that the mkts are punishing hard certain stocks for either missing analysts estimates or guidances.
example ABX.
 
#106 ·
since we do not have an URANIUM thread i wanted to share with the folks here that as far as i can see we hit the ultra low of U308 (250 pounds) contracts on the nymex as far back as 2010.
40.65 Us$
unfortunate but reality.
the RSI on the weekly is 5.54 .
NOV/dec/jan /feb 2012 are trading at that price.
prices on jan/17 we go to 47.1.
it is a sad story so far
 
#107 ·
I realize spot price is low but I thought CCO sold most of their Uranium in the long-term market at a much higher rate per pound.

I also still strongly believe that this is a slam dunk if you have patience. There is upcoming increase in Uranium demand that can be seen from a mile away with all the new reactors coming online and uncertainty regarding plans of shutting reactors down in Germany and Japan (where will they get their energy from). Add to that the crushing of the Uranium Jr's post-Fukushima and the end of the nuclear arms treaty for use of Plutonium in Russian warheads as nuclear fuel and I see a visible change in upcoming Uranium pricing. Add to that CCO's ability to acquire attractive Juniors and upcoming expansion of their Uranium supply and I see a huge leg up for them.
 
#108 ·
PMR
i am long uranium stocks.
i just posted for folks that may not be aware that the prices basically hit all time bottom.
maybe.
i am holding long term.
the price i posted is not spot it is futures prices.
as for how much CCO is hedging their prices at i will be honest to say that i do not know at all. I do not even know if there is actually HEDGING in Uranium.
I know about hedging natural gas but i am not a trader of URanium lol.
 
#109 ·
My understanding is that much of Cameco's uranium supply is bought already on long-term contracts with fixed pricing. Exactly what percentage fluctuates at spot prices I am not sure but I do believe the majority of their supply is already spoken for.

I do believe many of the smaller companies sell into the spot market which gives more volatility to their earnings.

I think the low spot prices plus decent contract pricing will allow CCO to buy out attractive Juniors and should be accretive to long-term earnings. They are one of the few companies in this space that will have the strength and liquidity to do this.

Here is what Cameco says on the subject:

Cameco has nuclear utility customers in 13 countries on four continents. We sell uranium in direct competition with various sources worldwide and pursue a strategy of selling largely under long-term contracts. Our strategy is to commit our uranium production to utilities under contracts with a diversified mix of pricing mechanisms.

Cameco has averaged uranium sales of 31.8 million pounds per year over the past ten years.

Currently, Cameco has commitments in excess of 300 million pounds of U3O8 under long-term contracts with about 50 customers worldwide. Our five largest customers account for 47% of those commitments.

Geographically, 49% of Cameco's sales volume is to utilities in the Americas (US, Canada and Latin America), 30% to European customers and 21% to utilities in the Far East.
 
#110 ·
Thanks for the info!
CCO fits my profile for a hold until share price achieves it's potential:
>>> world class business, strong fundamentals, ability to solve future problem (geopolitical energy issues), decent dividend, and currently very unloved.
Buy, accumulate, collect dividends, sell when potential realized.
Bought another 1000 today.
 
#113 ·
we are so doomed lol.
The last nuclear scare prevented the US from approving new reactors for 3 decades.
I wonder if this time it will hold it back.

Utilities are running out of uranium I bet, and they can't sustain their nuclear fleet if they don't purchase uranium.
I wonder who is selling them those uranium at such a cheap price? I mean, you need like 50-60 dollars price in order for a mine to be profitable.
 
#115 ·
I mean, you need like 50-60 dollars price in order for a mine to be profitable.
Before Fukushima, the price per pound was in the $70's; in the $50's earlier this year and even lower in the high $40's in 3rd quarter of 2012 as a result of the continuing weaker demand, so I would think the prices would need to be back in the $70's to be closer to profitable.

Current valuations are more than attractive for the patient investor.

http://www.kpmg.com/ca/en/industry/mining/documents/uranium-q2-2012.pdf
 
#117 ·
IMO, the market usually starts to sense a change about 6-9 months in advance. That is when there is enough critical mass of investors and institutions which forsee an obvious upcoming change in an industry and begin to back up the truck and pour oodles of money into a position. This way they aren't hung out to dry for a non-performing position held for a year.

I think now is a great time to buy because the price is low and there are a number of near-term catalysts for this stock. They have some of the best uranium mines in the industry, a low cost of production, no political risk, a new massive mine coming soon, pay a decent and growing dividend, have lots of long-term hedging contracts in place, have the financial strength to acquire weak Juniors with good projects who are starved for cash in the present climate.

I don't know exactly when this stock or I'd jump in on that date. I am happy to buy now at a discount, collect my dividend and wait.

A way to get some extra leverage to your positions would be to play some options - buy some out of the money calls far into the future, sell some in the money puts far into the future. You'll have to pay for time-value in scenario 1 or get paid for it in scenario 2. I usually prefer to get paid for options so I have sold some CCJ puts for Jan 2014.
 
#119 ·
IMO, the market usually starts to sense a change about 6-9 months in advance. That is when there is enough critical mass of investors and institutions which forsee an obvious upcoming change in an industry and begin to back up the truck and pour oodles of money into a position. This way they aren't hung out to dry for a non-performing position held for a year.

I think now is a great time to buy because the price is low and there are a number of near-term catalysts for this stock. They have some of the best uranium mines in the industry, a low cost of production, no political risk, a new massive mine coming soon, pay a decent and growing dividend, have lots of long-term hedging contracts in place, have the financial strength to acquire weak Juniors with good projects who are starved for cash in the present climate.

I don't know exactly when this stock or I'd jump in on that date. I am happy to buy now at a discount, collect my dividend and wait.

A way to get some extra leverage to your positions would be to play some options - buy some out of the money calls far into the future, sell some in the money puts far into the future. You'll have to pay for time-value in scenario 1 or get paid for it in scenario 2. I usually prefer to get paid for options so I have sold some CCJ puts for Jan 2014.

why is it so hard for people to buy something with married puts?
can't u guys grasp the idea that things can turn even more sour?
really people .
i am bullish long term uranium but for crying out loud who knows where the bottom is?
it looks like uranium futures may have hit a bottom.
am i sure it did?
of course not.
c'mon
 
#122 ·
I sold some 2014 puts a couple of weeks back when stock price was a bit higher that are a bit in the red but I'm not too worried about them.

The short-term price fluctuations of Uranium represent an ability to accumulate.

Many falsely believe that the deleverage and deflation will crush commodities. What they don't notice is that high quality commodity sources are much harder to find now than 15 years ago during the last commodity bust. The break-even costs on most new projects is much higher than current spot prices and this has devastated the funding for the Jr. explorers. Now when the uranium supply crunch hits the nuclear power companies are going to have to pay top dollar to get their supply from the existing producers. I have virtually no fear of going overweight Cameco at this price point.

Like I've said before, I usually prefer to get paid time value instead of paying time value so I like to sell puts to get a bit of leverage in my sails.
 
#131 ·
if u do
wait till it consolidates.
this is not a short term holding stock unless u actively monitor and trade it.
holding one core position only.
have not read the report yet and i am not in a hurry either.
if it was negative i expected it that way no matter what.
the main catalyst has not come forward yet.
 
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