Cameco Corporation (CCO.TO)

There are a lot of reactor projects, but they are massive and take a long time to get up and running. Uranium pricing has been moving better a little bit. Has never been a cheap stock and has never been that exciting to own. He needs to see some sustainable momentum or operational improvement before getting excited. Not that cheap. Why not look at a lumber name? You get that same kind of exposure and half as expensive with a growing revenue EBITDA.

Chart shows it is building a base and has a bit of a modified head and shoulders pattern. A bottoming pattern. It looks like the trend is about to turn to the upside. Material stocks generally tend to do well between November and May, but this being uranium can do well with energy stocks through the summer. This is one that you might want to nibble at here.

Has chosen this as his single stock to outperform the market during 2015. Had looked like uranium prices had finally bottomed at around the $28 per pound level. It had actually got as high as $40. Technicals have been fairly positive in the last little while, but the price of uranium has gone from $40-$35, which is not supposed to happen. This has caused the stock to slow down, but it is still in an upward trend. He wouldn’t be overly concerned, but seasonality does not support this particular trade.

It is trading at 12 times earnings with a decent dividend. Certainly Uranium is going to go up soon. Japan is going to start their nuclear power program soon. He would look to buy it a little cheaper.

He holds a small position. Thinks uranium has likely bottomed. Japan is slowly likely to come back online. Sentiment around the sector is improving. Thinks this is fine here. If he is right, and the sentiment improves in the sector, this could be a decent investment in the next 6-12 months.

It is having trouble at EBV+2, which is basically his level at $20.96. He has a model price of $30.60, a 48% upside. The real issue here is that the market has to agree with those earnings estimates, and the market is certainly not agreeing. He would feel better on a positive transit on is EBV+2. He would put a target of EBV+3, which is $28-$29, and get out of the stock. If it came back to $17.60, he would be a buyer.

This is one where you can wait and be patient. It is not going to move on you very much. He has decided to wait and watch it. If you are slightly late, that is probably okay.

He likes the industry. They are in a great position to supply India now as a quarantine has been lifted. If the commodity repaired itself, then all of these stocks would come back. This stock will lift up if money flows back into it.

The price of uranium, whether it spot or contract, was really in the tank. Then the courts allowed nuclear reactors in Japan to start up again. There are 20 more that have applications in. Doesn’t feel power plants are going to make much difference to the price of uranium. If you are going to be in the uranium space, it should be Uranium Participation (U-T), not this one.

(Market Call Minute.) Doesn’t see any near-term catalysts to get uranium prices going.

Chart shows that this had a nice little break out in the last couple of days, so technically the stock is in an upward trend. It’s trading above its 20 day moving average and outperforming the TSE Composite. Technicals are all turning positive at this point. Seasonality starts turning positive around the 2^nd week of April, and continues to be very strong right through until the end of May.

He would categorize this as a short term hold and long-term buy. The uranium market continues to be a bit challenged. This looks expensive because they are the biggest uranium miner in the world. Because of that, they are given a premium. Because of the problems in Japan, a lot of uranium has come off as the Japanese shut down their nuclear reactors. They are starting to restart some which should create a surge of uranium demand this year and next. Feels there is potential here.

(Market Call Minute) They have some issues with the CRA. It is cheap and has had some decent potential on the upside so offers you a fighting chance.

He thinks uranium is 2 or 3 years away and doesn’t see any catalysts in the short term.

Built a big base in the $15-$16 area and has bounced off it several times. With this kind of stock, you look for successful tests off a base, and you try to trade that. Trading at this off a base, you could make a half decent buck in relatively short term trades. Let it finish dropping to the bottom of the base and bounce, and it is probably worth a buy.