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Investing in Uranium: World’s Second Largest Uranium Producer Cameco is Heating Up

Thursday, September 3, 2009

Investing in Uranium: World’s Second Largest Uranium Producer Cameco is Heating Up


BASIC RESOURCES / IND. METALS & MINING / NONFERROUS METALS.
Cameco (CCO.TO) was blasted thru the recession just like so many of the resource related stocks in Canada. The stock hit a high back in 2007 during the last uranium bull market of nearly $60 a share and has since dropped to a low of $14.33 during the last down leg of the recession and now currently rests around $29.

All you hear about in the news these days is Oil This and Gold That, Real Estate This and Financials That. Who remembers the great demand for Uranium by China and other rapidly growing economies around the world?

August 12, 2009 - Cameco Says Utilities in China Stockpiling Uranium. There are 13 new nuclear reactors under construction in China and they have been buying an astonishing amount of the nuclear-reactor fuel on the spot market this year. Further, they will need to keep this demand rolling forward like a freight train to keep powering the new power plants for that hungry economy.

This demand has caught Cameco execs all starry eyed as they Completed a bought deal for $500 million worth of senior notes with a rate of 5.67%. Don’t think this cash is just for the sake of cash. This company is hopping and will be expanding with the new funds.

Only 3 weeks ago Thomson Reuters rated Cameco (CCO) a 6 out of 10 based on 18 analysts expectations for the company. Now the rating has jumped to a wopping 9 out of 10 and it seems like the Uranium train has left the station...next stop crossing $60. Currently the lowest price target set by one of the 18 analysts is $26, not bad if the stock now hovers just below $29.

If you look to a Google finance chart you will see the medium term trend has been broken to the down side, but don’t be fooled. The hammer is not down yet on this stock; the long term up trend is still holding and it looks like a great opportunity to jump in before the rest of the crowd realizes China craves Uranium like the US craves Gold. If you think Gold is your hedge to inflation and the recession think again; why not give Uranium a try.  I'm mean it's not like we have a DeLorean flux capacitor with adaptor to extract the protrons from garbage or do we Marty?

1 comment:

The Irritable Farmer said...

Definitely worth a look. And FYI, Cameco's NYSE ticker symbol is CCJ, not CCO.