Rating Change #2
Cameco Corporation (CCJ) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
Highlights from the ratings report include:
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CAMECO CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 35.8% when compared to the same quarter one year ago, falling from $142.39 million to $91.49 million.
- 40.80% is the gross profit margin for CAMECO CORP which we consider to be strong. Regardless of CCJ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CCJ's net profit margin of 20.10% significantly outperformed against the industry.
- Net operating cash flow has significantly increased by 99.92% to $266.03 million when compared to the same quarter last year. In addition, CAMECO CORP has also vastly surpassed the industry average cash flow growth rate of 25.24%.
- CCJ's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.88, which clearly demonstrates the ability to cover short-term cash needs.
Cameco Corporation operates as a nuclear energy company. The company operates through three segments: Uranium, Fuel Services, and Electricity. The Uranium segment involves in the exploration for, mining, milling, purchase, and sale of uranium concentrate. The company has a P/E ratio of 23.1, below the average metals & mining industry P/E ratio of 23.7 and above the S&P 500 P/E ratio of 17.7. Cameco has a market cap of $11.1 billion and is part of the basic materials sector and metals & mining industry. Shares are down 32.7% year to date as of the close of trading on Tuesday.You can view the full Cameco Ratings Report or get investment ideas from our investment research center.