David Talbot, Vice President and Senior Mining Analyst at Dundee Capital Markets, has a “buy” rating on industry leader Cameco Corporation (USA) (CCJ). He says the company is poised to benefit in a strong price environment, and is often a first choice among investors.
“They recently reported record annual revenue with 30% higher realized prices than spot,” Talbot says. “Operations are working exceptionally well.”
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However, Talbot says Cameco’s management does have a fairly bleak near-term outlook for uranium, and they are deferring capital projects and future production. In addition, the U.S. IRS has initiated a pricing transfer investigation of Cameco, and the company has an outstanding tax liability issue with a Canadian revenue agency.
“So there are [a] couple of things that might cast the shadow over the stock over the next couple of years,” Talbot says.
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