Watch Out: Barbarians At The Gate For Cameco (CCJ)

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 $29.1 million.
  • CCJ has traded 1.5 million shares today.
  • CCJ traded in a range 225.2% of the normal price range with a price range of $1.43.
  • CCJ traded above its daily resistance level (quality: 44 days, meaning that the stock is crossing a resistance level set by the last 44 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.

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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 2.1%. CCJ has a PE ratio of 42.1. Currently there are 5 analysts that rate Cameco a buy, no analysts rate it a sell, and 5 rate it a hold.

The average volume for Cameco has been 1.8 million shares per day over the past 30 days. Cameco has a market cap of $6.7 billion and is part of the basic materials sector and metals & mining industry. Shares are down 19.4% year-to-date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cameco as a hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself and deteriorating net income.

Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 93.59% to $262.48 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 -6.46%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CAMECO CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CAMECO CORP increased its bottom line by earning $0.79 versus $0.64 in the prior year.
  • 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 169.1% when compared to the same quarter one year ago, falling from $211.27 million to -$146.00 million.
  • The share price of CAMECO CORP has not done very well: it is down 10.92% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. 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.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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