Cameco (CCJ), Denison (MKT), Uranium One (UUU) Could Soar on Uranium Demand

Contrary to official announcements from some nations, demand for nuclear energy, and by extension uranium remains high, and companies such as Cameco Corp. (NYSE: CCJ), Denison Mines Corp. (NYSE:DNN) and Uranium One Inc. (TXS: UUU) could to very well as the fly under the radar created by the official illusion that countries are moving away from nuclear energy.

Germany and Japan are the major countries in question, where they have made it appear they are using other energy sources, when in fact they're mostly importing electricity that is generated by nuclear energy.

The Energy Report asked expert Matt Badiali about the nuclear-free announcements by the two countries.

He responded saying this:

In both cases, the governments are playing politics. In Germany, the government was reacting to negative press and in Japan, which had just experienced a serious natural disaster. The Japanese government told people for decades that nothing of that sort could ever happen, that the nuclear reactors were completely impervious to natural disasters. That put them in a position where if they tried to make any improvements, they would lose face. They backed themselves into a corner and the only solution seemed to be to turn off the reactors. But the reality is that Japan needs nuclear energy. Without it, liquefied natural gas (LNG) imports have soared and the country doesn't have the infrastructure to move it around. The result was a horrendous summer of spiking electricity prices and rolling brownouts; it was bad news.

Germany used the Fukushima disaster and the negative sentiment that followed to push through a carbon-free agenda. What is really ironic is that Germany is not in a place that gets earthquakes or tsunamis. It is not at any risk for that. It also isn't a place where solar power works really well. Turning off the nuclear plants leaves the country without adequate energy generation infrastructure, so they increased imports of electricity from France. However, over 75% of France's electricity is generated by nuclear power plants. So really all they did was outsource their nuclear reactors. At the same time, they brought on an enormous amount of coal power, which is the single-worst contributor of carbon dioxide. It was politics at its finest.

Badiali sees uranium climbing as high as $100 a pound and higher based upon the reality that miners producing uranium do so at the cost of about $106 a pound. They are getting paid about $40 a pound as of this writing, so the idea they'll continue to charge costumers at a loss of around $66 a pound is ludicrous. The price of uranium will rise over time, and those positioned to take advantage of that should reap solid rewards.

Besides the share price of some of these companies going up because of an increase in the price of uranium, another play is to look for companies ripe for a takeover in the current low uranium price environment. It's the optimal time for a buyout, as the prices will start to go up, making it a surety that mergers and acquisitions in the sector are going to happen.

Potash (POT) (RIG) (CCJ) (CHK) (EPL) (UDRL) (AGU) Ratings Changes and Initiations

Shares of Potash Corp (POT), Transocean (RIG), Cameco Co. (CCJ), Chesapeake Energy (CHK), Energy Partners, Ltd. (EPL), Union Drilling, Inc. (UDRL) and Agrium (AGU) had ratings on them adjusted or initiated by analysts.

Goldman Sachs (GS) upgraded Transocean (RIG) from a "Sell" rating to a "Neutral" rating. They have a price target of $54.00 on the company.

TD Securities downgraded Cameco Co. (CCJ) from a "Buy" rating to a "Hold" rating. They have a price target of $24.00 on the company.

Stifel Nicolaus downgraded Chesapeake Energy (CHK) from a "Buy" rating to a "Hold" rating. They have a price target of $22.00 on the company.

Stifel Nicolaus downgraded Energy Partners, Ltd. (EPL) from a "Buy" rating to a "Hold" rating.

Gabelli downgraded Union Drilling, Inc. (UDRL) from a "Buy" rating to a "Hold" rating.

Dundee Securities initiated coverage on Agrium (AGU). They placed a "Buy" rating on the company.

Dundee Securities initiated coverage on Potash Corp. (POT). They placed a "Buy" rating on the company.

Denison (DNN) (CCJ) (USU) (URRE) Ready to Rebound?

Shares of Denison Mines Corp (AMEX:DNN), Cameco Corporation (NYSE:CCJ), USEC Inc. (NYSE:USU) and Uranium Resources, Inc. (NASDAQ:URRE), among other companies with significant uranium and nuclear exposure, have been taking a big hit since the middle of February and afterwards, as the earthquake and tsunami in Japan caused some damage to some of its nuclear reactors, which gave some pause to the industry, which had been flying high.

The most recent hiccup was the decision by Germany to shut all of its nuclear reactors by 2022, which resulted in a number of the companies taking another hit.

As Bill Gates recently stated, wind and solar may be "cute" industries, but nuclear is the future of energy, and is mostly the only choice to realistically meet the growing demands of the market.

In the U.S., natural gas is also a legitimate source, as the supply in the country is extraordinary, and could last for a century or more.

From the nuclear sector standpoint, Germany is irrelevant in the long term, as they only have 17 reactors, accounting for only about 5 percent of global uranium demand.

Other major nuclear demand comes from the U.S., which has 104 reactors; France with 58; and China, which has been on a huge nuclear built out, has 27 under construction at this time, another 50 in the planning phase, and 110 more proposed.

All that has happened is the time it'll take to get the new nuclear reactors operational may have been extended; at least that will be the official line fed to and reported by the media.

How many think that China and its vast need for energy has halted anything, no matter what they may assert to the media? They may have went over their safety measures, but the Japanese earthquake was a rare anomaly which can't really be planned for, and the idea we can live in a risk-free world is Utopian, not a reality.

So the nuclear industry will continue to grow quickly, although it will still be a long-term play for those investing in it, and will include a number of issues over the short term which will generate volatility, as in the case of Germany saying it's going to abandon nuclear.

Uranium Resources closed Friday at $1.73, falling $0.08, or 4.42 percent. USEC Inc. ended the session at $3.94, dropping $0.11, or 2.72 percent. Denison closed at $2.12, down $0.02, or 0.93 percent. Cameco Corporation closed at $28.15, declining $0.62, or 2.16 percent.

Cameco (NYSE:CCJ), Denison (AMEX:DNN), USEC (NYSE:USU) to Soar with Rising Uranium Demand

There are few industries that can be so easily seen as profitable in the long term, but uranium is one of them and companies like Cameco (NYSE:CCJ), Denison (AMEX:DNN) and USEC (NYSE:USU) are sure to soar over the long term as nuclear power is expected to surge over the next decade, with huge demand and diminishing supply.

Add to that Russia's decision to no longer downblend its weapons grade uranium, starting in 2012, and that will create up to a 20 million pound shortage in a global supply situation that is shrinking.

In about a 10-year period, shortage could reach as high as 100 million pounds, guaranteeing a huge increase in price as demand far outstrips supply.

For the short term, the story is different, as supply is ample, while some companies have dropped orders that had been counted on.

Over the next two or three years expectations are uranium shortages will already begin, and expand from there.

One other short term element to watch, is how China views the situation. In the past if they feel prices will skyrocket for a commodity, they have bought huge amounts and stockpiled it.

With energy being one of their major challenges, they could begin to do this in advance of price increases in order to secure their needed supply for the future; or at least for many years ahead.

If they go that route, prices could go up sooner than expected. If not, the patient, long-term investor will ultimately get a huge pay out from this sector.

It's only a matter of when, not if.

Morgan Stanley (NYSE:MS) on BHP (NYSE:BHP) Olympic Dam Expansion

The misguided and damaging taxation of the mining industry in Australia may have received another blow, as Morgan Stanley (NYSE:MS) said BHP Billiton will probably halt development on their Olympic Dam project in response to the 40 percent tax on mining profits in the country, scheduled to begin in 2012.

Included in the project is the largest known uranium deposit in the world.

Morgan Stanley analyst Craig Campbell said, “Our modeling of this project shows that the resources super profits tax reduces the net present value of the project to an extent that it becomes negative.”

With the cost of expansion for the mine expected to be from $20 billion to $40 billion, it's highly unlikely BHP will commit to something that once they start, could crush their earnings for years based on the super tax.

This could over the long term benefit uranium miners like Cameco (NYSE:CCJ) who will also benefit from the end of the 'Megatons to Megawatts' initiative of the Russians, which will remove about 24 million pounds of uranium from the market in 2013, the year it ends.

Increasing demand for uranium makes this a good play for uranium producing companies with a lot of exposure to the commodity.

Cameco (NYSE:CCJ) Positioned Strong for Growing Nuclear Demand

The short-term performance of Cameco (NYSE:CCJ) isn't certain at this time, as the growing interest and commitment to nuclear power as a source of energy is growing, and Cameco is positioned strongly to take advantage of that, although it is more of a long-term play for sure, but one that will ultimately reap great rewards for those patient enough to wait for them.

Essentially, what Cameco does is supply uranium to nuclear power plants, which are starting to sprout up across the world.

Along with growing demand will be supply challenges, especially when the 20-year Russian program dubbed 'Megatons to Megawatts' ends in 2013, as approximately 24 million pounds of uranium will be removed from the market, which has accounted for almost 13 percent of overall consumption in the world.

That has kept uranium prices down, and should change the pricing structure as demand increases and supply is left in somewhat of a vacuum for a period of time.

Cameco should be rewarded in those circumstances, and rebound from recent 52-week lows, as it is sure to have either hit bottom or close to hitting bottom.

Cameco (TSE:CCO) China Uranium Opportunity

Leading Canadian uranium producer Cameco Corp. (TSE:CCO)(NYSE:CCJ) should benefit strongly from the growing economic ties between Canada and China, as leaders of three Canadian provinces head to the middle kingdom to drum up even more business.

Alberta, Saskatchewan and British Columbia are represented by the contingent, and they're loaded with resources ready and available to those willing to invest in them, and China is definitely the leading country with demand for commodities at this time.

Executives from Cameco are traveling with Saskatchewan premier Brad Wall, meeting with the largest nuclear power firm in China, which is looking to expand to meet the growing energy needs of the country.

Uranium reserves in Saskatchewan account for 26 percent of global production, making the province the top choice for those needing the material for nuclear energy.

Cameco should profit greatly if some deals are struck, which is highly likely, as Canada is doing business right with the Chinese by removing bureaucracy and making quick deals ahead of their competitor nations who try to impress the world by making it hard to do business with the Chinese.

Cameco (TSE:CCO) Strongly Positioned for Nuclear Revival

Cameco Ready for Nuclear Revival

There is no doubt we're entering into an amazing time of nuclear revival for generating electricity, and one company positioned to take advantage of that is Cameco Corp (TSE:CCO).

Less than honest evaluations of the nuclear industry and safety has held back the much-needed source of electricity, but that has changed as France has shown that uranium, the chief fuel for nuclear plants can be safely recycled, and eliminates one major concern for the sector.

Another fuel that will probably gain acceptance going forward is thorium, which gives a more efficient burn than uranium and lowers the need for recycling.

For Cameco, they recently mentioned their uranium mine at Cigar Lake should produce up to 18 million pounds of fuel a year when it reaches full production.

Cameco Ready for Nuclear Revival