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?
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?