Cameco Corporation (CCO.TO)

If you own, this is a tough one. Certainly they are a low cost producer of uranium, but the problem is around the demand side. There is a feeling that Japan is going to restart reactors and you hear about new reactors going to start in China and globally. On the supply side, you hear about the reduction in the Russian highly enriched uranium. All these things should point to a better uranium price but it has not. He is on the sideline until he sees some improvement in demand. If you own, he would probably continue to Hold as there is not much more downside in the near-term.

Has been more interest in uranium recently. The Russian program shipped last shipment in November. Japan only has one or two plants working vs. 52 previously. They are reviewing power plants but haven’t approved them yet. People are saying this is the bottom. It is an entry point but will be a trade.

Uranium area has a double whammy in low cost natural gas and some countries are turning off Uranium-powered generators. But at some point the turning off of nuclear reactors is probably overdone.

Truly great Canadian assets. He wants to pay $10-$12 for it (would get it as high as $15). At $20 it is already pricing in the good things that are going to happen.

Came out with very, very good results for Q3. China is the driving force in new planned nuclear reactors as they are trying to diminish the use of coal. He has a target of about $24 in the next 12 months.

If you want exposure to the uranium sector this is the blue chip way to participate. Reactors restarting in Japan in a very political thing and he doesn’t try to predict it.

Came out with fantastic numbers today. Took a lot of people by surprise. It is still all about Japan when it comes to uranium. Japan really doesn’t have any choice but to start using uranium for power. If big institutions start to move into uranium they are only going to look at this one, not anything else. Cigar Lake will be coming on stream in Q1 of 2014. Suggests you take a half position at this time. Be cautious.

We keep hearing that nuclear is going to expand going forward but, in the developed world, that is at least a 10 year time horizon.

(Market Call Minute) It will be a while before uranium regains its popularity.

(Market call Minute) More likely to short than buy. Does not like Uranium at this time.

Looked at this over the last 3 years and looked at it again today. The underlying issue with uranium is that the supply should start to decline by around 2020, which is when a lot of the Russian uranium supply will be finished (from the nuclear arms). All the big uranium companies have aggressively been looking for uranium and spending a lot of money on it. On a valuation basis, it is still trading at about 15-16 times earnings so it doesn’t sound extremely cheap. Japanese nuclear reactors have come off stream for the most part. In the short term, he doesn’t see any reason to own this, but if the stock fell because of weakening earnings, you would get an entry point. For a long-term investor, there could be a lot of upside in the next decade or so. He would like to see it at around $15.

Uranium sector. He prefers U-T because it is a pure commodity. There are some problems with the reactor in Japan. German is getting out of nuclear power. There are some problems for uranium generally.

(Market Call Minute) Doesn’t like uranium because of Japan but if you owned one Uranium stock this would be it.

Blue sky in their future. Fundamentals are probably going to improve. Demand will pick up as nuclear reactors are restarted over the next few years in Europe. Issues with starting up Cigar lake will push things out, but this is normal with Uranium mines.

If you have a long-term view of 7 to 10 years, this should do great. Spot price of uranium is down to $34, which is crazily low, but this is a glacial market. You could almost wait to see the spot price moving to $40, which would confirm the trend.