CCO.TO or CCJ (NYSE)

E

Enginer

What would be your choice as a US-based investor with access to both TSE or NYSE for Cameco?

I note that CCJ appeared to appreciate a little more at the end of the week even tho the Canadian dollar strengthened on average.

The variations between prices appear to be currency fluctuations as much as anything.
 

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I have owned this one for a while now. I prefer the Canadian stock over the US. The Canadian currency is more stable than the USD and I prefer to have some of my assets in that currency. Whenever a foreign stock trades on a foreign exchange that I have access to, I will buy it at the foreign market to have exposure to that currency. Just a thought.
 
Why would that make a difference?

Surely CCJ and the Toronto based listing would be arb'ed out based on USD/CAD rates.

I think what really matters is what currencies Cameco's customers will be using to pay for uranium, in effect. Not the currency they use for the transaction, of course, but the currency relevant to their business that they use to base their decisions on.

That's gotta be Yen and Yuan, right? Not a bad idea.
 
Quote from DrChaos:

Why would that make a difference?

Surely CCJ and the Toronto based listing would be arb'ed out based on USD/CAD rates.

I think what really matters is what currencies Cameco's customers will be using to pay for uranium, in effect. Not the currency they use for the transaction, of course, but the currency relevant to their business that they use to base their decisions on.

That's gotta be Yen and Yuan, right? Not a bad idea.
More...

Uranium is priced in US dollars. I actually did a project last winter/spring for a finance class that I was taking at the time, did some statistical analysis, and found that Cameco's stock price had some negative correlation with the CND/USD exchange rates. Of course, it just so happens that Uranium prices have been very strong at a time when the Canadian dollar has also been strong, so that could explain it. The period in question was most recent 5 years (at the time).

Last I checked, Cameco's financials cover their forex heding exposure, their commodities (they also have some gold interests) are priced in US dollars and the company's costs tend to be in Canadian dollars.
 
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