CCO Overpriced? Not a chance.I don't own CCO, I am just watching with curiousity as speculation as to this or that continues within uranium stock. There is always a chance that Cigar Lake will be abandoned (there is chance in everything), however, like any mining company and their reserves, the uranium, a very high grade uranium, still exists in the ground does it not? When other mines have flooded i.e. Potash, companies look at alternative mining practises and then implement the technology. There is no way a company, especially with the future outlook for their commodity, will just throw up their hands and say, 'We tried to fix it for a few weeks, I guess it's time to give up, sorry guys, we're done, billions down the tube.'. It will open, it is just a matter of when. Cameco's other mines, McArthur which is in the permiting stage to increase (double?) production, will backfill any loss in production in the short term.
In regards to CCO price, I don't know how each person evaluates price, I guess I would look at the p/e, as well as past growth in earnings, life of reserves, and I can't see how CCO is overpriced. I've watched analysts on ROBtv over the past few days and CCO is a top pick for many of them. CCO priced at 35 p/e and didn't they double their profits from last year? Imagine what they will do when they complete their old uranium supply contracts and new prices are in effect. You want to know overpriced uranium stock, DEN is p/e of 2000, with really no increase in production in sight, their Midwest mine project involves draining a lake, imagine the permits and environmental assessment associated with that, only to get at uranium with a grade that cameco views as waste tailings at their McArthur mine. I think when the investment community finally comes to realization that no other uranium company in the next 20 years has any ability to produce the quality and quantity of uranium that Cameco does (other than Areva and they are private), you will see CCO go to $80, not to $15. Den, Sxr, Palidin, are not going to see any significant profit for years, they are low quality miners. If you ever see Uranium prices move back to $25 (which I can't see as there will not be any significant increase in competition production and only increased demand), these other guys will be sunning their bellies and only CCO will remain. The only thing I can see is uranium becomes too expensive for power generation and coal then comes back into fashion.
If I can free some cash I am buying CCO. Long it will do well, and like I said before, after Oct. 31st there will be a spike in SP on earnings results. Everyone stay long, rationality always returns to the markets, it just sometimes takes a little bit longer.