IBD Stock Of The Day CamecoFlashes Buy Signal As Earnings...

IBD Stock Of The Day CamecoFlashes Buy Signal As Earnings Skyrocket 1,000%

Cameco

CCJ

$ 40.97

$0.06 0.15% 19%

IBD StockAnalysis

• Working on consolidation with 42.17 buy point
• Surges past early entry on skyrocketing earnings
• Relative strength line at long-term high

Composite Rating

87/99

Industry Group Ranking

142/197

Cameco (CCJ) is Tuesday's IBD Stock Of The Day, as the uranium exploration and mining outfit reported better-than-expected third-quarter earnings and increased its full-year revenue outlook even as Q3 sales missed projections. CCJ shares surged Tuesday.

And you know, we'll

we'll see where it goes fromhere.

The Canada-based company reported early Tuesdaythat third-quarter EPS ballooned more than 1,000% to 23 cents, easily toppingWall Street expectations. Cameco revenue increased 44% to $416 million, butcame in below analysts' prediction of $486 million.

The company added that in the first nine months ofthe year it delivered 22.2 million pounds of uranium at an average realizedprice 13% higher than in the same period last year. Meanwhile, sales inCameco's fuel services segment grew 7% in the first nine months of 2023 with anaverage realized price 9% higher than 2022.

Chief Executive Tim Gitzel said in the earningsrelease Tuesday that Cameco's Q3 earnings were driven by "positivemomentum we are experiencing in the nuclear energy industry."

Gitzel said there is growing support for nuclearpower while geopolitical uncertainty surrounding Russia's invasion of Ukraineand the recent coup in Niger has "intensified supply concerns as futureuranium supply and downstream processing is needed to balance the market."

The Cameco CEO added that there are productionchallenges and that the market does not have the "inventory or secondarysupplies to absorb market shocks."

"We are seeing durable, full-cycle demandgrowth across the nuclear energy industry," Gitzel added. "Thesefactors lead us to believe that we are experiencing the industry's best evermarket fundamentals."

Cameco now predicts 2023 consolidated revenue of$2.43 billion-$2.58 billion vs. its previous forecast of $2.38 billion-$2.53billion.

CamecoStock

CCJ shares jumped 7.9% to 40.85 in Tuesday market action in strong volume following the company's earnings beat. In October, Cameco stock is up 3%, on pace Tuesday for a seventh straight monthly gain. CCJ shares are up more than 80% in 2023.

Cameco stock is gapping up on earnings in a shortconsolidation, which could become a valid base after this week. Investors couldalready use 42.16 as a buy point.

For aggressive investors in the current marketenvironment, CCJ shares could be viewed as actionable Tuesday above the 50-daymoving line and its short-term high of 39.77, which it hit last Wednesday.

The relative strength line hit a nine-year highTuesday, according to MarketSmith analysis, a bullish sign.

CCJ stock joined SwingTrader on Tuesday.

However, there is elevated risk in the currentmarket correction.

Cameco stock has a 74 Composite Rating out of a best-possible 99. CCJ shares have a 96 Relative Strength Rating and a 29 EPS Rating. The EPS rating should start to improve.