USEC, Inc. (USU)

This met a high level screen to indicate a buy and strong outperform against its peers (other tickers in its industry). My 1st version of this spreadsheet devles deep into the company's balnace sheet and recent income statements, combined with other relevant price data for the company including insider/institutional holdings, short interest, debt levels, etc.
Testing capabilities of this 1st version of my automated, valuation spreadhseet matched with my personal criteria and see how it holds up.

It all hinges upon the sucess of the American Centrifuge Project.

uses disarmed soviet nuclear missiles as power source for elecricity in USA. Wow! talk about " swords to plowshares"

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Passes an earnings surprise value screen

Estimated EPS 2009: .42
Estimated EPS 2010: .65
Current P/E 9.11
forward P/E 5.9
PEG: .166

newwealth.blogspot.com

“new, state-of-the-art centrifuge uranium enrichment plant in 2010, and at full production by late 2012. With 30 new nuclear plants in the works, a DOE secured loan imminent for $2B, and a virtual monopoly on the US LEU market”

“USU is the most viable candidate to receive a lions share of $2bln-$4bln worth of Department of Energy loans earmarked for companies that enrich uranium. They are presently the only licensed enrichers of uranium in the United States. They enrich 50% of the uranium used domestically, and 25% of the uranium used world wide. They are presently tapped out of cash having spent every penny developing and proving an enrichment technology that reduces the power consumption of their enrichment process by 95%”

The opportunity: They just got their loan denied by Uncle Sam for the rest of the plant. Go figure, this is exactly not the sort of firm they would support being an alternative energy and a textbook example of American innovation. Glad that we are ‘just trying to make sure the working people get a fair shake in this country’, right?

The Valuation: Had sales last year of 2 billion. It now has customer commitments valued at more than$3.4 billion for the new plant, after Exeleon came to the table with a wet pen for 1.2 billion promptly after the Govnmnt balked. If they get the plant up it doubles their business, either way they have the technology. Now if we start making sense and we are going to see 30 new plants (QUESTION: WILL IT HAPPEN?) this would turn this into an absolute screamer. I have to think that if they were cranking at 8 billion in sales that the margins would expand (say conservative 5% from current 2%) and then you have a company with income of 640 mil a year, at current valuation it would be a 90 dollar stock.

NUKE industry friend outlook to the question above: "Do I think we will see new plants, absolutely maybe not 30 but with the amount up for application and the number already scheduled to break ground next year there will definitely be new construction. As far as reprocessing goes this is technology we developed some time ago and have yet to use it commercially it is currently only used for DOE purposes. The first commercial reprocessing facility was supposed to open in IL a year ago but clearly that didn't happen. I believe there was also a reprocessing facility slated to be built somewhere in Texas that was also abandoned before it got going. The reason for this is simply politics there are organizations spending ridiculous amounts of money trying to stop this from happening which in turn drives production costs up. France has been using reprocessing for quite some time now without any problems. The major drawback to reprocessing is that one of the byproducts is weapons grade plutonium. I think eventually we use reprocessing but we will see new construction at least 5 years before we start reprocessing. "

I actually like this company, and I think that their future is bright. However, I'm concerned by two news articles detailing the difficulties the company is facing getting additional government funding for the American Centrifuge plant (posted on Washington Post, July 29th, USEC Denied Loan Guarantees and posted on Yahoo Finance, Sept 28th, 1,000 Jobs Lost at Uranium Plant).

Specifically, the fact that the government wanted the company to wait 12 - 18 months before reapplying (the government seemed to offer $45 million in research money instead of the loan request), but USEC is going to try again early next year. I'm not sure that the government's position is going to change so quickly. Without the government's loan, I submit that it would be difficult to get private funding, especially considering that the American Centrifuge project is only half funded at this time.

I feel that the stock is valued for less than its worth. Once the company is approved for the loan, I bet the stock will turn around as the market sees the value. I fully anticipate that the government will eventually approve it - I'm just not sure when. Until then, I'm going to watch this stock. I'm just too conservative to buy now.

Current 5.13, Sept 20 09. Limit 3.66

green energy will win big

Speculative buy, depending on the results of their attempts to refinance this stock can go either way. Approval is not guaranteed but the conditions in the capital markets have improved considerably since last year and if this was aug/sep 08 they would stand much less of a chance.

Nuclear power is still a viable energy option and USEC is in the mix, however with the DOE announcing a delay on the final review on the company’s loan guarantee application for the American Centrifuge Plant in Piketon, OH it is hard to speculate beyond 6-12 months. If the guarantee is approved, this stock could easily double or triple.

Will be efficient producer of uranium and there will be good growth in atomic power needs. DOE loan guaranty will probably come through within a year.

EXPECT LOAN TO BE APPROVED BY DOE.

They need that DOE loan....just like BCON. BCON got one and their stock dropped 30% instantly. This should work out well.

Mmm...nuclear energy...

Are you kidding me? This is a perfect company that wanted a loan from the government and was denied. With the government support this company has, i am sure they will give them the loan once they realize that their profits just jumped 60%. Basically the company got their new quarterly report and withdrew their loan concerns. This is a winner

Key to energy growth with worldwide distribution. Potential huge increase in Nuclear energy and they supply vast amount of LEU

They'll manage

correction is overdone... will bounce back