I sold my Cameco position at the end of last week for an 81% gain, which is far more than I had expected investing in a well-established producer.
Reasons I invested (Late January, 2022):
- The uranium spot price narrative: essentially the spot price of one pound of uranium, at $46, was below the cost required to incentivize producers to bring pounds onto the market. This means the price must eventually increase if we want to continue to use nuclear power. With more nations warming to nuclear recently, it’s apparent that we plan to use more nuclear than in the past.
- With the Russian invasion of Ukraine and the decoupling of supply chains from Russia, Cameco stands to gain marketshare (was at 11.61% of global uranium market in 2022).
- Tim Gitzel comes across as pragmatic CEO
Reasons I sold (Sept, 22, 2023):
- The share price surpassed my (vague) sell price. I had entered the trade hoping to gain about 40%. I held on for as long as I could before my reason told me to sell.
- Recent insider sells on CCJ:
- Spot price had jumped to 65$/lbs.
- Mania around uranium had returned to Reddit and was appearing more frequently in news media
- Share price matched ATH of May, 2008 (this is not a a good reason but likely affected me somewhat)
- The threat of recession seems to growing stronger and the market in general has been down in the past several weeks.
- If you don’t sell, you can’t make money.
Is there room to run? Likely. Still, given the above, I felt it was time to take my investment off the table.
I like Cameco and will reinvest if the uranium market turns down significantly as it did in the last 10 months. This was a good trade and I hope to replicate its success with other commodities (currently looking at ALB).
Disclaimer: This content is for informational purposes only and should not be construed as financial advice. The views and opinions expressed are those of the author, who is not liable for any losses or damages arising from any actions taken based on the information provided in this blog. Investing and trading involve risk; you are solely responsible for your decisions.