Cameco (CCJ)

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[edit] prices will bounce spot U IS A GOVERNMENT $$

Suggestion by BBRACING on 2008-09-04 17:54:39

prices will bounce spot U IS A GOVERNMENT $$

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[edit] stock should be 31$ or higher the shorts are out !!!! join in I guess

Suggestion by BBRACING on 2008-09-04 17:01:00

stock should be 31$ or higher the shorts are out !!!! join in I guess

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[edit] Even though Cameco is the largest uranium producer in the world, it has ...

Suggestion by Irakrakow on 2008-01-07 21:47:36

Even though Cameco is the largest uranium producer in the world, it has significant international competition. CCJ, although operating in politically stable Saskatoon, Saskatchwan, Canada, assumes considerable political risk in its business model.

Cameco had to write down $105 million to restructure its gold business in the Kyrgyz Republic, pending the eventual forcible transfer of its interests to this dictatorial regime. Other countries may seek alternate sources of supply. For example, Japan secures 30% to 40% of its uranium from Kazakhstan, which holds the world's second largest reserves of uranium. Uranium production in countries like Niger can be held hostage to political changes.

Cameco is principally dependent on its uranium sales, especially after the spinoff of its gold operations to Centerra. It does not obtain all its uranium from mining. For exmaple, CCJ contracts with Russia to purchase uranium from dismantled Russian nuclear weapons. Russia asked for renegotiation based on higher uranium prices. The new (higher) price will hurt Cameco's margins.

Also, the increase in the price of uranium is by no means certain. In fact, uranium spot prices have slumped in the last half of 2007, from a high of 130 to around 90. This is a potential problem for Cameco, given its dependence on uranium. As a comparison, one of its major competitors, Rio Tinto (RTP), which is not as heavily tied to uranium, has a PEG of .49, compared with Cameco's 1.67. This would make RTP, on purely a growth basis, a more attractive stock than CCJ.

All of this is grounds for caution.

Sources:
http://www.japannuclear.com/pressroom/news/89-U0TMOT7AuKLC2Xiy98sd/view http://www.seekingalpha.com/article/52425-analysts-downgrade-cameco-as-russians-request-renegotiation-of-uranuium-prices http://www.cameco.com/investor_relations/ux_history/historical_ux.php

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[edit] I see from the stock chart that the stock price of CCJ increased dramati...

Suggestion by Tim Plaehn on 2007-12-27 12:54:02

I see from the stock chart that the stock price of CCJ increased dramatically a few years ago and has pulled back since. Since the article said that uranium is purchased on longer term contracts, I wonder how much of the recent price increases in uranium have reached the revenues of the company. What is the average price CCJ has received for their uranium over the last few quarters and last few years as the spot price for the product has increased. Also, what profit margins has the company been making on the uranium purchased from the Russian company, and what margins are expected if the contract is renegotiated. When does the current contract run out? Finally, what are the possibilities for CCJ to acquire or be acquired by the competition. As the leading company it the field I would think they would be looking to increase their lead and power by buying up some competition.

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