We are all aware of how in uncertain times, stocks with no current earnings get sold off. Business school teaches you to discount expected future cash flows back to today and you get the price. As the DC rate rises these companies will have their valuations hit. We have seen that but that pain is behind us. These two factors and nothing in the fundamentals are why we are down from double digits. If you do a DCF making assumptions about the size of the nuclear enrichment business and GE's market share, you can value the nuclear side of SLX. This alone will be between $30 and $200. Im not kidding, do it yourself, but of course it depends on the assumptions and forecasting at failry long range. The key variables (hard to estimate) are industry size and GE market share. The rest is pretty straight forward. This is why when we see articles like the one in my post "truly going global" about a week ago we should get excited as it leads us to believe GE will be the dominant player in the global nuclear fuel business. This is a far better company than it was at $13.50, it cant be sold down any further. As we see more certainty about how significant nuclear will be over the medium term, the case for a big fat BUY on SLX will be airtight.
SLX Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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