Cameco Corporation (CCO.TO)

For a 5+ year hold? 5 years is tough, because there are 2 issues. 1) When is new demand for reactors going to pick up, and 2) it has an argument with the CRA, which has yet to be resolved. If he were going to own uranium, it would be through Uranium Participation Corp (U-T).

The science and rationality behind nuclear energy is undisputed, but whether or not we are able to harness that energy in a safe manner is the question. He wouldn’t be a buyer.

This has not been covering itself in glory. If you want carbon free baseload power, you have to have nuclear power. Wind, solar and Hydro are not suitable for baseload. Over time, you would think there would be some demand for uranium, but this has been a disappointing stock. You need to see some power plants actually going online.

There has been a tax dispute going on for a while. The depressed state of the uranium market is hitting them. There needs to be some supply rationalization. We might be getting close to the bottom of the uranium market. He would not buy in right now. The tax dispute will take time. It will not put them under. It is just another overhang.

This has been a house of pain for so very long. Their Cigar lake operation is now operating in very good stead. Unfortunately, the price of uranium is killing them. Doesn’t think that that will prevail forever. A good, long term, blue-chip name you want to accumulate when it is completely out of favour, which is right now. You can sell Puts and oblige yourself to own it at $10 between now and December and maybe make $1. Eventually this will be worth a lot more.

(Market Call Minute.) He doesn’t own any thing in uranium right now. At some point in time, with all the nuclear plants that are coming on board, the stock is going to probably respond, but at this time he is happy just to watch.

Has been an extremely disappointing stock. This is really the timing of an improvement in the uranium market. Big overhang. Lots of nuclear reactors being built globally, but there is a big inventory overhang that you have to work your way through. You are probably looking at 2-3 years before there is some visibility. In the meantime, he expects the stock will go sideways.

This has great value, but you have to wait for the underlying commodity to move up. This company is a low cost producer. The question is, how long do you have to wait before you start to get a return.

Doesn’t think there is any near term, or even medium term catalyst to get the stock moving. Uranium prices are at historical low levels. It is very oversupplied. They missed numbers in their latest quarter. The restart-ups in Japan have been very slow to happen. Also, there are some closures in the US. There was a cancellation on one of their long-term contracts. They have a tax trial coming up in October. Doesn’t see the stock doing much over the next 6-12 months.

(Market Call Minute) Uranium keeps collapsing. Long term it is a good company. They seemed to have solved all their problems.

The world’s largest producer of uranium. The spot price on uranium has been pretty brutal as of late. It goes back to Fukushima several years ago. The Japanese really haven’t started up their nuclear reactors yet. Long-term, this is a screaming Buy. Short-term, this is probably range bound. The next year could be choppy because the spot price is under pressure. Feels that if you bought it today, you would make money on it in 5 years.

The 3-year chart shows this is continuing on a downtrend. You don’t try to catch a falling knife. He would avoid this. If you own it, he would be looking for an exit.

Uranium Industry. A year or so after Fukushima he jumped on this, thinking Uranium would be part of the cleaner uranium needs the world has, but after a year or so he got out of uranium. He has not seen anything yet that a bottom is in. It could still weaken still.

He is watching this and spending a little bit of time looking at it because it is so beat up. Reported a pretty miserable Q2, and the stock fell further. It still trades at a relatively high valuation multiple of about 17X next year’s earnings. There are still a number of concerns about the oversupply of uranium, and part of that needs to be resolved by getting a number of these Japanese nuclear reactors back online. There is also a CRA issue that is overhanging the stock, and it is probably priced in. If there was a negative decision from the trial, it could have a further negative impact on the share price.

(Market Call Minute) They have just gone through the toughest quarter in the toughest market in the last decade. The average weighted production cost is around $31, where Uranium is right now. Start to build a position.