Energy Co. Reports Superb Earnings

Source: Michael Ballanger 11/03/2023

Michael Ballanger of GGM Advisory Inc. shares why he believes this uranium company’s stock is worth your while.

After listening to the Cameco Corp. conference call yesterday, I was kicking myself squarely where I sit down because, as a bull on uranium for at least five years, I never entertained the idea of owning the world’s fourth largest uranium producer.

While it has had its share of problems over the past few years, it appears that Cameco Corp. (CCO:TSX; CCJ:NYSE) has finally cleared the decks.

“Gross profits have also improved as our uranium average unit cost of sales decreased from last year as we continue the transition back to our tier-one production cost structure . . . We are seeing durable, full-cycle demand growth across the nuclear energy industry.”

The stock added US$3.05 (5.6%) yesterday but is challenging the 52-week high at US$42.165, above which it has blue-sky potential, not unlike the last time it broke out to a new high in July, when it added 27.93% in three months.

Also significant is the 2007 all-time high, last seen when uranium prices hit US$138/lb. at US$45.49. The two price hurdles are all that are standing in the way of an explosive move to mirror the July-October ramp, which would suggest a target range of US$53.96 to US$56/86.

The price triggered a bullish MACD crossover ten days ago, and the money flow indicator is bullish. RSI at 64.53 is approaching “overbought,” but as you can see from the move back in September, RSI went into the 80’s and stayed elevated for several sessions before it corrected.

Accordingly, I think that there is still room for a Q4 dash led by a top performer in a largely ignored sector as portfolio managers scramble to generate alpha as they head toward year-end bonus time.

In the GGMA Trading Account:

• Buy 50% position in CCJ:US at $42 limit. (Add on any weakness)

Or

• Buy 50% position in CCJ March $40 calls at $5.50. (Add on any weakness).

More of this later.

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Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Cameco Corp.
2. Michael Ballanger: I, or members of my immediate household or family, own securities of: Cameco Corp. My company has a financial relationship with: Cameco Corp. I determined which companies would be included in this article based on my research and understanding of the sector.
3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: CCO:TSX; CCJ:NYSE,
)

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