Cameco (TSX:CCO; NYSE:CCJ), one of the largest uranium producers providing approximately 18 percent of world production, has been on the downslide with its stocks losing 29.12 percent year-to-date on the TSE and25.22 percent on the NYSE.
Over a one-year period, the company's stocks have decreased 32.78 percent on the TSE and 32.31 percent on the NYSE, putting Cameco near multi-year lows. On top of that, in July Cameco reported its worst quarterly performance since 2005.
In the press release, the company's president and CEO Tim Gitzel said that its quarterly results were affected by a quiet market together with a "number of notable and one-time items."
A loss of $57 million and sales dropping 20 percent from quarter-to-quarter were contributing factors: the company reported sales of only 4.6 million pounds of uranium for the three-month period, its lowest in 10 years.
"Market conditions have become increasingly challenging over the past five years. Primary supply has simply not responded to decreased demand, and coupled with an abundance of secondary material available today, the uranium market continues to be oversupplied," Gitzel said in the press release. "As a result, prices have remained under pressure, and because we don't know how long the current weak conditions will persist, we must manage the company with that uncertainty in mind."
Although things have been relatively bearish for the powerhouse uranium company, Gitzel remains positive. In August, Cameco released its 2016 Sustainable Development Report--the company's sixth--which it describes as a "report card to stakeholders on the social, environmental and economic performance of the company."
"Although the last five years have been tough for our company and our industry, I believe Cameco has risen to the challenge," Gitzel said in the release. "Our people have found ways to be innovative, and to do more with less, without compromising on our commitments to safety, the environment and communities."
With that in mind, all hope isn't lost for Cameco, or for the uranium industry as a whole: currently, there are 60 power reactors being built around the world--as per the World Nuclear Association (WNA)--most notably in China, South Korea, the Middle East and Russia. The WNA suggests that nuclear power capacity worldwide is "increasing steadily," with the 60 additional reactors going under construction.
As of now, there are 440 nuclear power reactors operating in as many as 31 countries, but the new additions are expected to increase annual uranium demand 50 percent by 2030, according to the Motley Fool.
Should you invest?
While Cameco's shares have lost almost 30 percent year-to-date and are currently hovering around $12 each, some analysts are predicting the company to "make a strong comeback" as the prices recover and demand from China continues to grow.
According to The Street, Cameco isn't a "get-rich-quick investment." Instead, the publication notes it is a solid long-term investment, especially with more nuclear reactors on the way.
What's more, The Street suggests that "Cameco is a solid investment opportunity that deserves your attention," and that analysts expect its stocks to rise 37 percent over the next year.
On the other hand, Motley Fool says waiting to invest in the company until it has resolved a few of its issues, but notes that "eventually, Cameco will see better days."
Still, investors will surely be curious to see how Cameco rebounds from its 1o-year low.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.