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Cameco (CCJ) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Cameco ( CCJ) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cameco as such a stock due to the following factors:

  • CCJ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $36.1 million.
  • CCJ has traded 4.3 million shares today.
  • CCJ traded in a range 202.5% of the normal price range with a price range of $0.87.
  • CCJ traded above its daily resistance level (quality: 80 days, meaning that the stock is crossing a resistance level set by the last 80 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CCJ with the Ticky from Trade-Ideas. See the FREE profile for CCJ NOW at Trade-Ideas

More details on CCJ:

Cameco Corporation produces and sells uranium worldwide. The company operates through four segments: Uranium, Fuel Services, Electricity, and NUKEM. The Uranium segment is involved in the exploration for, mining, milling, purchase, and sale of uranium concentrate. The stock currently has a dividend yield of 1.8%. CCJ has a PE ratio of 28.2. Currently there are 6 analysts that rate Cameco a buy, no analysts rate it a sell, and 4 rate it a hold.

The average volume for Cameco has been 1.7 million shares per day over the past 30 days. Cameco has a market cap of $8.0 billion and is part of the basic materials sector and metals & mining industry. Shares are down 2.4% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cameco as a hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

Highlights from the ratings report include:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 1438.3% when compared to the same quarter one year prior, rising from $8.54 million to $131.34 million.
  • CCJ's debt-to-equity ratio is very low at 0.25 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.29, which illustrates the ability to avoid short-term cash problems.
  • CCJ, with its decline in revenue, slightly underperformed the industry average of 3.4%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to $6.99 million or 97.40% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • In its most recent trading session, CCJ has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.

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