Cameco Turns Into Uranium Value Stock (CCJ)

Cameco Corporation (NYSE: CCJ) already trades closer to its 52-week low than its high $21.18 versus $16,59 and $31.25, respectively) and it is already at a significant discount to the consensus analyst price target of $30.59.  A new call from Gabelli & Co. this morning is highlighting the strengths here.

Gabelli’s analyst report said, “We find Cameco particularly compelling given its attractive asset base and project development pipeline. The gradual restarting of nuclear reactors in Japan as well as China resuming the issuance of new reactor build licenses are potential near-term catalysts for CCJ.”

Another boost is that Japan’s Trade Minister recently declared that the #3 and #4 reactors at Kansai Electric Power Company’s Ohi nuclear power plant in western Japan are now safe to restart after passing safety inspections. Apparently the next step to restarting the reactors is to get public support and approval from local communities near the reactors.

Gabelli finishes with the call for roughly 50% upside with an attractive valuation of 8.7-times the Gabelli 2012 EBITDA estimate.  It also trades at a 37% discount to the firm’s 2013 Private Market Value of $32.00 per share.  It is often that these private market values are much higher than the consensus price targets from other analysts but that is just not the case here.

JON C. OGG