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Cameco Strike: Speed Bump or Real Concern?


Cameco is likely to trade much higher over the next 18 months, and the current volatility presents a buying opportunity.

Yesterday, uranium producer Cameco (CCJ) announced a strike by the United Steelworkers Union. In response, Cameco is shutting down the McArthur River and Key Lake operations.

If you recall, I recently said this was a buy [subscription required] and I still believe it is. 

Here's why:

1) Convserations are ongoing and I don't think this strike will last long as an ongoing work stoppage is not in the interest of either party.

2) This disruption is not expected to disrupt deliveries or contracts as the company is ahead of production and should easily be able to fulfill its contracts.

3) This is not shutting down progress or the beginnings of production of what should be their biggest mine, Cigar Lake.

So basically, we have a knee-jerk reaction that in my view provides a better buying opportunity closer to the recent trend line.

Bottoming is a process, so volatility will still be prevalent as long as we are below the 200-day moving average.

We are still forming a nice base above 18.50, which will likely propel us much higher over the next 18 months or so.
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