Uranium Leader Cameco Trading Below Net Asset Value

Shares of uranium producer Cameco (NYSE CCJ) are 50% off their highs and are now trading below net asset value.

Desjardins Securities analyst John Redstone:

"Previous valuations accorded by the market used earnings with a high multiple based on the anticipation of a sharp increase in the price of uranium, he said in a note to clients. "Since then, however, the price has dropped considerably to US$53 from a high of US$146. It is highly debatable whether such high multiples will be applied anymore."

Mr. Redstone said he still believes Cameco stock can rise to its net asset value, adjusting his price target from $34.20 to $29.55. Reflecting the current share price, he also upgraded his recommendation from "hold" to "buy."