Usec Inc (NYSE:USU)

CAPS Rating: 1 out of 5

A global energy company that supplies low enriched uranium for commercial nuclear power plants.

Recs

10
Player Avatar JakilaTheHun (99.94) Submitted: 7/28/2009 11:17:34 AM : Outperform Start Price: $89.50 USU Score: +34.32

I'm speculating on this a bit, but after the precipitous fall this morning, USEC looks like a good pick up to me. USEC fell almost 50% after being denied a loan guarantee by the Department of Energy for its American Centrifuge Plant. Even if I assume that roughly $500 million worth of their assets can be written down, that still leaves them with net tangible assets around $4 to $5 per share.

Earnings for the prior four years seem to range from about 20 cents per share to $1 per share. Playing it a bit on the safe side, I think normalized earnings of 30 cents per share is not unrealistic and even if I wrote down $1 billion in their assets, that should yield an intrinsic value somewhere around $3 to $5.

Without researching USEC more, I'm going to wager their valuation should be around $5 - $10. At $3.50, it looks pretty good to me. It seems to be bouncing back rapidly after the huge fall, so not sure how long it will be available at a cheap price. I'm more neutral on this over $5.

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Member Avatar FOCKEWOLF (< 20) Submitted: 7/28/2009 12:44:57 PM
Recs: 0

Definitely a great buy, I jumped on at $3.87 and jumped off at $4.08. Made a quick $1,300. I will buy it again tomorrow at $3.50.

Member Avatar hallen52 (< 20) Submitted: 11/1/2009 7:45:49 AM
Recs: 0

Bought at 4.01 buying more on Monday. It will spike after earning report tuesday after the bell. I think i'll hold should hit 8.00 to 10.00 within a year.

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