Cameco Corporation (CCO.TO)

(Market Call Minute.) This is one that he would buy below $10.

If you want to own the sector, you might as well go for safety and security of the largest company. This is a sector he doesn’t pay a whole lot of attention to right now. You might have to wait 5 years for the cycle to turn.

A 1^st rate mining company, but it is uranium, and sells its contract in a sort of staggered form. It doesn’t get exposure to the spot market. Doesn’t think there is a tremendous upside to the uranium market. A relatively small part of the budget of nuclear power plants. Although there are a lot of nuclear power plants under development in China, it is still not enough to really move the needle. At the best, this is a Hold, and possibly a Sell.

(Market Call Minute.) He has been looking at this. Uranium prices moves like it is in quicksand. Attracted by the valuation, but maybe not just yet.

This has been hurt because uranium prices have gone up. Fundamentally it is attractive, but uranium prices just don’t seem to move. They also have a tax overhang.

This looks like it wants to go lower. A very choppy stock. The long-term trend is down. It has a target of around $8.

Tends to like stocks when they are rallying and had gotten interested in this when it was about $18. A cheap stock given what it is, but it is never really that cheap. Uranium pricing has been very, very weak. Everybody seems to think it is a very tight dynamic supply/demand and can’t understand why prices are so low. That is the problem with commodity stocks. He tends to lean towards stocks that he can understand fundamentally. Because of that, he has always stayed away from this.

She doesn’t own any uranium stocks. After the disaster, there was a moratorium on a lot of nuclear plants. It has been very slow to come back on stream. Eventually, for countries like China, nuclear is going to be a source of power for their energy demands. There is no near term catalyst for uranium. If you have a very long-term horizon, you could keep holding it.

Uranium has been a very tough place to be, and this has been a chronically underperformer, going back to 2007 when it peaked out. When there are lots of companies doing well, and lots of sectors that people care about, trying to pick a bottom in something that has been falling for 10 years is a tough thing to do.

Chart shows the financial crisis peak was in 2007 followed by a rally in 2011, which was well below the peak. When that happens, you know that the stock is not going to go anywhere for a long time, which has happened in this case. Unless the price of uranium can get above $40 a pound, it is going to be dead money for a while. Thinks the downside is limited, but also the upside is limited. This is a trade that will do no harm.

He doesn’t really look at uranium stocks. You hear the Chinese are building lots of reactors, but Japan and Germany are closing down nuclear facilities. There is not a lot of growth for nuclear in the rest of the world. This is an energy stock and it trades like an energy stock. He would rather own oil companies.

Has always been wary of uranium. It is not just a supply/demand problem, but is also a political animal. The US has continued to build large inventories of uranium, so there doesn’t seem to be any immediate reason for the price to go up. They just got approval to double the capacity of their McLean Lake production facility. On the other hand, their last quarter had some definite disappointments.

Thinks it is building a base and it has plenty of room to go higher. It’s been very, very range bound for quite some time. Needs to get above $17-$18 to change the channel that it is in right now. If he had this, he would continue to hold.

This is strictly a supply/demand scenario. Right now there is so much momentum in other things that he would be shoring up those monies in the areas where he sees momentum coming, and that would be on precious metals.

Hold or Sell? It is going to take a couple of years for uranium to resolve itself. Expects at today’s price, you will be happy 5 years from now. What he does in situations like this where there is underlying value, if the stock is volatile enough, selling near dated Puts and Calls and capturing the premiums. That forces you over time to do something logical, Buy low and Sell high, and it causes you to get paid doing something logical in the interim. You need to talk this over with your financial advisor.