January 25, 2024
Top 10 Stock Cameco Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Cameco – Top 10 Stock in Nuclear Energy
Cameco is listed as a top 10 stock on January 25, 2024 in the market index Nuclear because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 66 (high 66% performer), Obermatt assesses an overall buy recommendation for Cameco on January 25, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Coal & Consumable Fuels |
| Index | Low Emissions, Nuclear, TSX Composite |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Cameco Buy
| 360 METRICS | January 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 6 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 66 |
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ANALYSIS: With an Obermatt 360° View of 66 (better than 66% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cameco are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Cameco. The consolidated Growth Rank has a good rank of 99, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 99% of competitors in the same industry. The consolidated Safety Rank at 62 means that the company has a financing structure that is safer than 62% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 69, which means that professional investors are more optimistic about the stock than for 69% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 6, meaning that the share price of Cameco is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 94% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 66, Cameco is better positioned than 66% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 99), a safe financing structure (Safety Rank of 62), and positive professional market sentiment (Sentiment Rank of 69), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Cameco compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (99% better than peers). The value rank could be the reverse reflection of that (1%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Cameco positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Cameco is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Cameco. Analyst Opinions are at a rank of 89 (better than 89% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 83, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 83% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 26, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Cameco. There are also only so many institutional investors holding company stock with a Professional Investors rank of 42, which means that, currently, professional investors hold less stock in this company than in 58% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), Cameco has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Cameco Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 6 (worse than 94% compared with alternatives), Cameco shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Cameco. Price-to-Sales is 7 which means that the stock price compared with what market professionals expect for future profits is higher than 93% of comparable companies, indicating a low value concerning Cameco's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 13, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Cameco. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 1 and Dividend Yield, which is lower than 77% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 6, is a sell recommendation based on Cameco's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Cameco? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Cameco? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Cameco may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Cameco Growth Momentum high
| GROWTH METRICS | January 25, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 70 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 96 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 76 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 100 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 99 |
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ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, Cameco shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Cameco. Sales Growth has a value of 70, which means that, currently, professionals expect the company to grow more than 70% of its competitors. The same is valid for Profit Growth with a value of 96 and for Capital Growth with 76. In addition, Stock Returns had an above-average rank value of 100, which means they have been higher than 100% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Cameco exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Cameco Debt Financing Safety above-average
| SAFETY METRICS | January 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 86 |
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| REFINANCING | ||||||||
| REFINANCING | 74 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 62 |
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ANALYSIS: With an Obermatt Safety Rank of 62 (better than 62% compared with alternatives), the company Cameco has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Cameco is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Cameco.Leverage is at 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors.Refinancing is at a rank of 74, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 74% of its competitors. Liquidity is at 8, meaning that the company generates less profit to service its debt than 92% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 62 (better than 62% compared with alternatives), Cameco has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Cameco Above-Average Financial Performance
| COMBINED PERFORMANCE | January 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 6 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| COMBINED | ||||||||
| COMBINED | 60 |
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ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Cameco (Coal & Consumable Fuels, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Cameco are low in value (priced high) with a consolidated Value Rank of 6 (worse than 94% of alternatives). But they show above-average growth (Growth Rank of 99) and are safely financed (Safety Rank of 62, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Cameco's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Cameco exhibits low value (Obermatt Value Rank of 6), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 99). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 62) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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