Stock price when the opinion was issued
Came off quite significantly between December and March. Previous high was ~$85; the 50% retracement takes us to $72.50. This is where we saw some resistance in early February. Hard to say if it would get to $80. Usually, if there's a move in a stock, the countermove can often be about half of that.
CCO has had three broker target price downgrades in April. In addition, the uranium sector has been weak as investors consider whether Russian exports will be allowed to resume if there is some resolution to the Ukraine War.
Unlock Premium - Try 5i Free
He and his team are secular bulls on the nuclear renaissance. Cheap and clean. Has second-largest stock of uranium in the world. Utilities that buy uranium are like deer in the headlights right now on uncertainty of whether Washington will broker a truce with Russia on Ukraine, bringing Russian uranium back online.
Uranium stocks had a fantastic run. Not at a 12-month low but, fundamentally speaking, you have utilities that aren't properly covered in terms of their needs. Supply issues. Not many are starting new mines, as they wait for prices to get back to $100/pound. It takes time to start new mines. Buy it now, knowing of the fundamental global energy trend in place. Modular reactors will become reality over the next 10 years.
Spot market is what people look at every single day, and that's where you see the gyrations in uranium prices. Right now, ~$65/pound. Term market is where most of the long-term contracting gets done, such as by utilities; and that one's been fairly steady.
Extended in the short term, likely to see a pullback to around $74-75. Once that's done, broader reacceleration after that. But downtrend definitely broken, and it's in a new intermediate-term uptrend.
A rising tide floats all boats, and that's where we are now in the market. But remember that August and September are typically the worst months for equities. So you can hold this name till then, but then look to manage some risk.
Super bullish on AI, it's just getting started. We're going to run out of power before we run out of demand for AI. Need energy, cooling, construction, labour, chips, racks. Hard to tell what future's going to bring. Demand for data centres will be a bumpy story as the economy ebbs and flows.
Nuclear is exciting, but unsure how quickly you're going to make money. CCO is a great business with great operations. Good for those who bought the dip in April. He'd prefer nat gas via TOU.