NEW YORK (TheStreet) -- Cameco Corporation (CCJ) hit a one-year high of $24.50 on Wednesday on the heels of reports that Shinzo Abe's government in Japan had drafted a new Basic Energy Plan in which nuclear power plays a crucial role.
The Japanese government's plan should provide a boost to America's largest uranium producer because the first draft states the government would restart the nuclear reactors deemed safe by the Nuclear Regulatory Authority. Japan shut down all of its nuclear reactors in the wake of the disaster at Fukushima almost three years ago.
In its latest quarterly earnings release, Cameco stated the slower-than-expected rate of Japanese reactor restarts was a primary factor in the decay in the uranium market in 2013. Consequently, Cameco canceled its previous supply target of 36 million pounds in 2018.
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TheStreet Ratings team rates CAMECO CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CAMECO CORP (CCJ) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 15.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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 55.1% when compared to the same quarter one year prior, rising from $41.48 million to $64.34 million.
- CCJ's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.94 is somewhat weak and could be cause for future problems.
- Net operating cash flow has decreased to $161.85 million or 42.71% when compared to the same quarter last year. Despite a decrease in cash flow of 42.71%, CAMECO CORP is in line with the industry average cash flow growth rate of -51.05%.
- 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.
- You can view the full analysis from the report here: CCJ Ratings Report