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Cameco shares drop as supplier seeks higher prices

Shares of Cameco fell 7.84% today because a supplier of uranium from Russian nuclear weapons is demanding higher prices.  Personally, I think the market is overreacting to all news regarding uranium stocks lately.  

Especially the bad news.  All the bad news seems to have a common theme: supply disruptions.  If one examines the big picture, each supply disruption is a catalyst for higher uranium prices considering the supply-demand fundamentals are so out of line.  Higher uranium prices of course means higher net asset values and future cash flows for all uranium mining companies.

Of course it is still painful for shareholders of Cameco.  I took it in the chin yesterday when UUU.TO went down 18% on its supply disruptions too.  In times like these, I grit my teeth and keep reminding myself that short-term pains should result in long-term gains.  And if you have some extra cash, now is the time to buy those two stocks.

By Theo at 2007-11-01 17:53 | Stocks | UUU.TO | Theo's blog


Buying UUU.TO from US broker

Does anyone know the best way to buy UUU.TO from the US? My broker, Schwab, offers it as SXRZF, but I'm not seeing any bids/asks for today at all. Are there US brokers who let you trade Canadian stocks directly? Newbie pains. :(
By Pooh at Thu, 2007-11-01 19:25 | login or register to post comments

A couple of them

I complained about this a while ago and there are a few solutions.

Penntrade allows one to trade US and Canadian stocks from a single brokerage account ($30 per trade).

Etrade has a good global trading platform that allows you to trade Canadian, English, German, French, Hong Kong, and Japan exchanges. Commisions are quoted in local currencies. I bought some Canadian stock recently and the $20 Canadian dollars is becoming more expensive by the day :)

Whatever you do, don't trade OTCBB pink slips. You're just asking to be raped by a market maker.
By smtkr at Thu, 2007-11-01 21:48 | login or register to post comments

Thanks

Thanks smtkr, I'll check out Etrade..
By Pooh at Thu, 2007-11-01 23:15 | login or register to post comments

CCO down on supply disruptions - of course!

Market does not yet think of Uranium as essential. Until people start moving from oil to uranium, uranium will suffer. I predict that there will be a Uranium "bear" market for the next few years. And it may be bad during next few months when entire market may be in trouble as a whole. There will still be MANY buy opportunities for Uranium and I do plan on buying into it.

Uranium is not viewed as an essential energy source. People (investors) think that oil is the only source of energy, period. Uranium had a blip since 2003 when some people that are clued in (and speculators) bough into Uranium. Now, speculators are moving out. And a lot of investors view Uranium as just a metal that is not really essential. People are still talking about closing nuclear plants! But oil == uranium == energy. Oil will go nowhere but up. So where will Uranium go?? Where will uranium go when people realize oil is gone as energy source for power grid?? (ok, they'll buy coal in short term :)

Anyway, these are long term trends. In short term, Uranium may go down until critical supply crunch occurs. When? Probably by 2010 or 2012.

PS. Remember, market is not rational. It is like a mob of panicky kids. Hence it doesn't make sense as as it not with Uranium.

By adam at Sat, 2007-11-03 01:05 | login or register to post comments

RE: CCO down on supply disruptions - of course!

I have to respectfully disagree.  The only people closing nuclear plants is India because they have ran out of uranium.  The fact that they were forced to close plants speaks volumes about the current situation.

There are rolling blackouts through China as they await for nuclear plants to be built.  However, the Chinese are securing supplies of uranium now.  The rest of the world is also building more nuclear plants -- even the United States in September 2007 put in the first application to build a reactor in America since 1973.  Without nuclear, how is the world going to generate the ever-increasing electricity needs of a growing population?

Now is the time to be in uranium stocks.  I agree there will be many opportunities throughout the next few years to buy uranium stocks for, as we just saw in the summer, they are extremely volatile.  But the stocks are cheap today.
By Theo at Sat, 2007-11-03 20:09 | login or register to post comments

RE: CCO down on supply disruptions - of course!

http://query.nytimes.com/gst/fullpage.html?res=9E04E2DA1E3EF935A25755C0A9669C8B63

I know the above is old, but there is still a lot of talk about closing nuclear power plants, especially in environmental movements and even some political parties like the Green Party. And as you know, it is the general public that buys/dumps stock most irrationally - institutional investors are generally much less volatile. And people are afraid of nuclear anything. "Normal" people and environmental movement continue to view nuclear as "not safe" and "unclean" in spite of all evidence.

Uranium mining (and reprocessing, when the world awakes to shortages) will continue to be very profitable. And there is NO CHOICE whether the world will use nuclear power or not - they have to.

So in summary, I think that Uranium stocks as a group may be undervalued and even get dumped in the next few years until the supply crisis becomes front page news and starts resulting in blackouts. That is why CCO price went down - people do not view Uranium as essential. Until U=oil=energy, a large number of individuals will not be bullish on Uranium. They just view oil=energy and Uranium as some commodity that is going down in value.

http://www.uxc.com/review/uxc_Prices.aspx
http://www.uxc.com/review/uxc_g_2yr-price.html


By adam at Mon, 2007-11-05 14:54 | login or register to post comments