Any thoughts on where this is going? Looks like it dropped right back down to where it was 6 months ago. I'd like to own this, but preferably at a lower P/E.
CCO has dropped for its $27 highs in March to $20 with the latest 4.5% drop yesterday after news of a tax avoidance squabble with the CRA:A recent RBC report on the supply and demand of uranium forcasts that the market will remain oversupplied until 2021.To review: In 1999, Cameco set up a subsidiary, Cameco Europe Ltd., in low-tax Zug, Switzerland. Cameco then signed a 17-year deal to take the uranium it produces in Canada and sell it to Cameco Europe before it made its way to the end customer.
By injecting a middleman into the transaction, Cameco is able to sell the uranium to Cameco Europe at the low prices reflective of 1999. As a result, Cameco is recording little to no profit in Canada. Instead, all the profits appear in Zug, where the tax rate is lower.
Source: http://www.theglobeandmail.com/globe...ticle18989010/Things are looking down right now for CCO. I own some CCO I am going to be watching it more closely.We have completed a detailed review of our supply/demand model. The global uranium market continues in a state of significant oversupply. Active annual supply exceeds demand by a significant margin, and on top of that, significant excess inventories have been and continue to be accumulated post the Fukushima disaster, particularly in Japan. We now expect the market to remain oversupplied until 2021, and for prices to be constrained over the next three to four years as a result. [...]
I bought CCO as a long-term hold because I expect the long-term demand for uranium to increase dramatically. This pick up in demand is taking a lot longer than I expected. I still think there is potential here.
I sold 1/2 for about 30% profit, which was adjusted/lowered from my original exit strategy, but the recent & quick highs were hard to ignore in this particular space.
I plan to pick up the sold 1/2 again with same cash/profits still sitting in my account; not far from my current ACB.
^ Oh, I did buy back!
Remember I was initially in & out in the $30's in 2010 [ u thought I had been crazy, remember?], so it was a no-brainer getting back in.