CCJ - Uranium names bounce as Cameco defends big Westinghouse deal
Uranium stocks begin to move higher Thursday after Cameco ( NYSE: CCJ ) CEO Tim Gitzel defended the company's decision to buy a 49% stake in nuclear power giant Westinghouse .
Cameco ( CCJ ) shares slumped 13.6% Wednesday as investors heaped skepticism on the company's plan to sell $650M in stock to help fund the deal.
While Cameco ( CCJ ) -0.5% Thursday near the noon hour, other uranium names are rising: ( UEC ) +2.7% , ( UUUU ) +1.8% , ( DNN ) +1.7% , ( URG ) +1.7% .
Defending the $7.9B deal , Gitzel said acquiring Westinghouse allows Cameco ( CCJ ) to capitalize on the full nuclear supply chain, rather than only being a source of the base fuel, and he sees a "wave" of demand coming for nuclear power as Russia's invasion of Ukraine was a "game changer" for countries seeking energy security.
Eight Capital analyst Ralph Profiti sees Cameco's ( CCJ ) acquisition as "a strategic move to diversify and vertically integrate along the nuclear value chain as a complement to its high-quality, tier-one uranium asset base and fuel services segment, which combines CANDU fuel manufacturing for heavy water reactors with [Westinghouse's] global nuclear fuel and plant services platform for light water reactors."
Analysts at Canaccord Genuity also believe the deal makes long-term strategic sense , as combining its existing upstream uranium production with Westinghouse's downstream capabilities effectively makes Cameco ( CCJ ) a "one-stop shop" for utilities.
Cameco ( CCJ ) warrants a Sell rating following the deal, Trapping Value writes in an analysis newly posted on Seeking Alpha .
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Uranium names bounce as Cameco defends big Westinghouse deal