lenny247
07-25-2007, 04:08 PM
A good bargain according to RBC and me. . .
this is from my blog . . .
http://blog.inspectorstock.com/2007/07/bad-news-for-sheep-camecos-stock-price.html
Here is a contrarian play for the truly brave. Right on the heels of a sell-off, RBC (Royal Bank of Canada) named Cameco a top pick on Friday July 20, before more bad news hit this morning (Monday July 23), when the company said it would halt output at an Ontario plant for at least two months following the discovery of contaminated soil. Ouch, bad timing for RBC? Maybe not.
"Centerra Gold, which is 53% owned by Cameco, has lowered its 2007 gold production forecast and raised its gold cash cost forecasts at its Kumtor mine. In June of 2006 the mine had a pit wall failure. Centerra will use flatter angles on the wall of the Kumtor pit to provide greater stabilization and this will require the removal of more waste and delay access to high grade ore until Q2/08. Cameco now expects lower 2007 gold production at Kumtor of 300,000 oz versus 450,000 oz as a result. RBC CM expects significant increases in Cameco earnings and cash flow forecasts over the next five years and believes that the shares offer upside potential as the negative effects at the Cigar Lake mine should be more than offset by rising uranium prices."
Wow - that is by definition, a salmon run, swimming upstream, going against the grain, moving in the opposite direction of the mindless, charging heards of sheep - stay clear, feeble, wimpy investors, baa, baaa, BAAAAAAA. Uranium is sliding, Cameco is falling like a brick and that is exactly why RBC likes it - good value if you are willing to stick it out. Keep in mind RBC named this top pick before this morning's bad news. RBC projects a five year price target of $80. This is not a trade, but an investment, Warren Buffet style. Do you have the stomach to wait this one out?
(EDIT: RBC reported today Monday July 23, after the bad news of the discovery of contaminated soil at the Port Hope plant, that it has not revised its estimates citing the fact that Cameco’s total conversion business accounts for only 5.5% of forecasted operating earnings in 2007 and high-lighting the fact that the chemicals are in a contained area, so public health and worker safety are not affected.)
Even after this morning's news (July 23 2007), that the company will halt output at its Port Hope, Ontario, plant for at least two months following the discovery of contaminated soil, I still think Cameco represents a good, long-term opportunity, but I expect the stock chart will look like a ski hill for a little while - short sellers will be happy. I expect uranium prices to head back up, EVENTUALLY. Cameco has been a rising star for the last year, but I wonder if it will be considered a dog now that a huge string of bad luck has hit it and the mining/metals/uranium sector in general. Never mind the bullocks, stay with the facts. Cameco is the world's largest uranium producer and nuclear energy is on the rise for the long-term. Has the stock bottomed? I suspect not, but either way, if you want in, buy in phases, not all at once.
DISCLOSURE: I do not own shares in Cameco. Always do your homework when you buy a stock.
this is from my blog . . .
http://blog.inspectorstock.com/2007/07/bad-news-for-sheep-camecos-stock-price.html
Here is a contrarian play for the truly brave. Right on the heels of a sell-off, RBC (Royal Bank of Canada) named Cameco a top pick on Friday July 20, before more bad news hit this morning (Monday July 23), when the company said it would halt output at an Ontario plant for at least two months following the discovery of contaminated soil. Ouch, bad timing for RBC? Maybe not.
"Centerra Gold, which is 53% owned by Cameco, has lowered its 2007 gold production forecast and raised its gold cash cost forecasts at its Kumtor mine. In June of 2006 the mine had a pit wall failure. Centerra will use flatter angles on the wall of the Kumtor pit to provide greater stabilization and this will require the removal of more waste and delay access to high grade ore until Q2/08. Cameco now expects lower 2007 gold production at Kumtor of 300,000 oz versus 450,000 oz as a result. RBC CM expects significant increases in Cameco earnings and cash flow forecasts over the next five years and believes that the shares offer upside potential as the negative effects at the Cigar Lake mine should be more than offset by rising uranium prices."
Wow - that is by definition, a salmon run, swimming upstream, going against the grain, moving in the opposite direction of the mindless, charging heards of sheep - stay clear, feeble, wimpy investors, baa, baaa, BAAAAAAA. Uranium is sliding, Cameco is falling like a brick and that is exactly why RBC likes it - good value if you are willing to stick it out. Keep in mind RBC named this top pick before this morning's bad news. RBC projects a five year price target of $80. This is not a trade, but an investment, Warren Buffet style. Do you have the stomach to wait this one out?
(EDIT: RBC reported today Monday July 23, after the bad news of the discovery of contaminated soil at the Port Hope plant, that it has not revised its estimates citing the fact that Cameco’s total conversion business accounts for only 5.5% of forecasted operating earnings in 2007 and high-lighting the fact that the chemicals are in a contained area, so public health and worker safety are not affected.)
Even after this morning's news (July 23 2007), that the company will halt output at its Port Hope, Ontario, plant for at least two months following the discovery of contaminated soil, I still think Cameco represents a good, long-term opportunity, but I expect the stock chart will look like a ski hill for a little while - short sellers will be happy. I expect uranium prices to head back up, EVENTUALLY. Cameco has been a rising star for the last year, but I wonder if it will be considered a dog now that a huge string of bad luck has hit it and the mining/metals/uranium sector in general. Never mind the bullocks, stay with the facts. Cameco is the world's largest uranium producer and nuclear energy is on the rise for the long-term. Has the stock bottomed? I suspect not, but either way, if you want in, buy in phases, not all at once.
DISCLOSURE: I do not own shares in Cameco. Always do your homework when you buy a stock.