Cameco Corporation (CCO.TO)

Has always had a low ROC, and is actually getting a little worse. Uranium prices are pretty close to their low as well. Dividend yield of 3.6%.

The price of uranium really hasn’t done much, which is not a good thing. There are a lot of reactors out there and more are being built, and in time there is going to be more demand. However, it is a little early to own this. Wait for more concrete evidence of firmer prices and improving demand.

An enormously disappointing longer-term investment. If the tax case goes in their favour, that will be nice, but the stock really hasn’t done a great deal. There has been a downturn in the demand for uranium. They are building a lot of reactors in China, and are looking to build a lot more in Asia. The only thing that doesn’t emit CO2 for continuous baseload power is nuclear. This is dead money at the moment.

He owns this, because it is a commodity company at the bottom of the uranium cycle. The uranium cycle was upended by the Fukushima disaster. Japan, being one of the big users of nuclear fuel, backed away and have not come back. Natural gas is cheaper in the short term, but we still need a lot of electricity. China is building 60 or 70 reactors and nuclear fuel, in a normal environment, is a low-cost provider. It has very limited environmental impact but has a very negative NIMBY association. There is still no solution in moving spent uranium from a reactor back to some place to store it. Has a $.40 dividend which is secure. This will end up being a spectacular investment.

A long-term kind of hold. Everybody is waiting for a uranium recovery in prices. The buying side has been on a bit of a strike. There seems to be no hurry in restoring long-term inventories among major users. No one is really making a lot of money at current prices. This company has the benefit of having a very good contract book, which protects them from short-term prices. Expects buyers will probably be back in the next 24 months to start to refill inventories, which will strengthen and bolster demand.

Probably the best uranium producer globally, but the commodity business is such that uranium prices have been weak and defying expectations for years. It is hard to have an attractive stock when your commodity price is weak. Renewables are filling up a lot of the area that we thought nuclear would eventually take on. The company has a little issue with the CRA on a tax issue, which could cost them several hundred million dollars. There are better places to be.

The Japan accident took off a lot of demand for Uranium. There has been a surplus of uranium out there from nuclear weapon dismantling and low cost countries’ production. He sees the price of uranium more neutral over the next 6 months.

It is a really tough industry. The best they have done over 20 years is a 5% return on capital and it is at 1% right now. He would look for it to come out of a cyclical bottom in return on capital.

If you want to own uranium, you own this stock because it is the pure play and the best play in the world for uranium. She doesn’t see demand coming back. The Japan story has been problematic. Every time there is a new plant supposed to be started, locals get involved and it gets killed. Also, periodically there are countries talking about switching out of uranium. She doesn’t see a robust demand for uranium.

Uranium is still one of the few ways to solve the world’s energy deficit if we are going to move away from hydrocarbons in a big way. The stock was hit by Korea announcing that they may shut down their nuclear power plants. However, uranium production is now below the price that most companies can produce it at. China is still moving ahead with a massive number of reactors, which will be bullish in the longer-term. Regarding their dealings with the CRA, the company believes that everything they did was rock solid with all the legal contracts in place. Dividend yield of 3.3%.

Uranium prices just keep sinking, without a bubble, which is dragging down this company’s share price. Although new power plants are coming online in some parts of the world, they are being closed in other jurisdictions. This is a world leader, but he is just not sure how long you are going to have to wait.

You could argue that uranium prices have really topped out. Uranium has really come back a lot since the Japanese crisis a few years ago. The nuclear reactor is coming back on stream, but is very slow. A few months ago, a major Japanese utility company cancelled their contract. A lot of their business is long-term contracts. They are also having issues with CRA on tax returns from a few years ago, which is a big overhang on the stock. If you have a very long-term outlook, uranium prices should improve, but she doesn’t see any catalyst for it to get back to $17 in the near term.

Doesn’t know what the catalysts are going to be to move it up, other than it just getting so cheap that it would reach the point of capitulation and so cheap that people would start to buy it. They still have the CRA overhang, which should probably be resolved later this year.

The real game changer in his view was when the OPEC cartel opted to take about 2 million barrels a day of global oil supply off the market to support prices. The Kazakhstan state owned mining company who controlled 30% of the global uranium supply, curtailed production by 10% in early January, and that immediately tightened the uranium market. The stock actually responded prior to that, so there might be some element of a Trump bump in there. Uranium prices have strengthened from $18 a pound to $23, and long-term prices are much higher. Dividend yield of 2.7%. (Analysts’ price target is $16.)

China has a lot of plants potentially coming on line. Uranium prices took a big beating and have come back somewhat. There is a good chance they go up in the future. He does not like CCO-T enough yet to buy it. If you want to invest in this field, this is one to invest in.