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USEC Inc. Message Board

  • wendell3308 wendell3308 May 6, 2008 1:48 PM Flag

    Urenco’s strong business profile underpinned by its contract visibility & excellent profit. S&P

    Only fools would invest in a company like USEC where contract invisibility remains paramount....

    ...vs URENCO where even a US stock rating company like Standard & Poor's gives it a strong recommendation.

    Couple this with Congressional collusion and confusion on the legality or progression of US dependence on nuclear energy.....

    Couple this with the failure of USEC to meet ACP reliability goals.....

    Couple this with the need for Congress to "guarantee USEC loans".....

    ....not my cup of tea.

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    • Thank you for your thorough response!

      While I am a strong believer in the potential for USEC given the niche USEC is in. The lack of execution to date is a real concern.

      An external audit is an excellent idea IMHO. I don't trust management groups or BODs to do the right thing. Especially in the scenario you describe, where they are in over their collective head and holding onto a position/paycheck to the detriment of the company. I certainly don't know if that's the case here, but I'd like to be reassured by somebody with no bias that that is not the case.

      I would also like to see substantial insider buying. I don't buy the argument "they are locked out". Maybe this is true, but they could/should be aquiring shares in a programmed fashion instead of selling. The arguments that: they have plenty of options, and everybody does it are bullcrap. Executve compensation in general is out of hand. Having executives who show some leadership, and buy significant quantities of stock on the open market is one of the truest indicators of a solid company.

      A significant portion of compensation should be in stock that vests over time (not options without downside risk). They can earn their obscene compensation packages by performing, and benefitting from the appreciation in the value of the company.

    • Good lord you must be one bitter URENCO shill, everything you have said has been taking out of context, embelleshed and out right lies...I don't have the energy to refute all this nonsense again, someone else please...

    • 1. Sloppy (incompetent) management: Inexperienced with centrifuges and seriously underestimating the task of building a REAL commercial SWU plant (the only experience they have is with running a leased GDP plant...and repeating 20 year old DOE centrifuge tests in a DOE test lab). USU are not really a hi-tech innovative company nor team...

      2. No experience from building a centrifuge plant --- for the ACP task at hand - even Urenco (with 30 years experience from developing 6 generations of machines) --- would be quite challenged to bring ACP on line successfully, and they would definitely spend a few years of reliability testing on the AC-100 before installing it in a brand new commercial plant.

      3. Management has no control over the major cost drivers - outsourcing AC-100 machine fabrication to Boeing (who built the DOE machines), and who then quit the consortia last year, made them lose control over costs. Finally, in an act of desperatiion USU buys the old factory for $5 million, installs new equipment and re-hires people, hands over the AC-100 blue prints and asks their new machine factory to produce 11,500 machines within 2.5 years (never mind they have never done this before).

      4. Finally, installing these 11,500 machines after only testing 40-50 of them for say 2-3 months is not a good recipe for long term success... the 'overwhelmed' engineers should not take the blame if there will be any problems... they are asked a "mission impossible task"...

      5. This "5 minutes before 12" act of taking over manufacturing shows management 'determination' finally to get their costs under their own control... but it does not look like a smart move... unless they take 'time out' to stabilize the entire ACP project (yes that may add additional costs - but these are much smaller than potentially caused by the hi-risk taking by "ordering full steam ahead in a sea with icebergs"...)

      6. It is not yet too late to 'save ACP' from disaster... but the question is - does USU still have the luxury of time to do it 'right'.

      7. The botched/bungled financing efforts last year - and then relying on USGOV to 'save them' and bail them out with loan guarantees does not indicate that they are still master of their destiny...

      8. Final answer - its a combination of USU bungling management in both technical and financial fields.... has caused ACP costs to skyrocket to $3.5B without contingency and financing costs, inspite of fact that USU gets the ACP building and infra structure (worth $0.5B) for 'free' from DOE. By comparison - URENCO LES estimates $1.5B in New Mexico and AREVA estimates $2B in Idaho (of course these costs may/will also increase - but they are tightly controlled). So - ACP will be less economical than the Urenco/Areva U.S. plants - from the getgo.... since power costs, operating and staffing will be same for ACP and the competitor plants.

      Investors should ask for an independent outside assessment to see if its worth to risk their money on the ACP... or just buy a Toyota (ie existing machine from the others).... even AREVA swallowed hard and twice and then gave up their own Laser, and their own centrifuges and teamed up with URENCO. If you run a Taxi business - does it matter what car your drivers have - as long as it is equally economical (or better) and is highly reliable...?

    • Urenco is mostly government owned. One can purchase German utilities with Urenco stakes but their Urenco stakes are a small percentage of the values of the socks
      Areva is a substantial player in enrichment but Areva enrichment is a modest part of Areva which mines uranium and builds reactors among other activities.

    • Ok...here we go one more time. You say that USEC is being reckless by testing a few AC100 centrifuges, less than 20 I believe you said, well let's look at other countries and see what they are doing.....let's say Iran for example. Their new centrifuge design, you know the one that can enrich uranium past LEU standards or better yet weapons grade. Well it turns out from experts estimates it is going to take atleast two years to get up and running efficently and they just made the damn thing. ACP technology has been studied for years in cooperation with the DOE. If Iran, who is bran-spankin new at this compared to the US can pull off a more difficult operation, enriching weapons grade uranium, then USEC will be fine. It doesn't make much sense to put on all the cars of a rollercoaster if you never seen if one cart can make it around the track does it? So if the Japanese completed their entire cascade without testing a few first, well I'm sorry to say this but they are stupid. But I'm sure they did no such thing, you probably screwed up your information again.

      • 1 Reply to lasalleandrew
      • You are very ignorant about this ACP business of RELIABILITY testing - your comments speak volumes. Let me just explain --- Japanese are not stupid, they did lots of testing (much much more than USU...) but did not catch the problem because it did not show up until after 5 years.... hint / URENCO tests their NEW generation machines more than 5 years in REAL cascades - before ever installing them in a commercial plant.

        USU has not even satisfied the BASIC DOE requirements for Cascade testing of AC-100 ... therefore DOE could pull the plug on USU tomorrow if they want because of USU's lack of reliability testing in a full cascade (as DOE/USU 2002 contract stipulates - 240 machines two years ago)....USU has NOT satisfied DOE's milestone on lead cascade testing to date (just used "spin language" and smoke and mirror talk to easy misled investors...)

        Read the Risk Section of USU's latest Annual Report on this very subject - before going on and babbling more nonsense.... USU "hopes" to come to an agreement with DOE over their non-fulfillment of stipulated DOE testing milestones(!).

        Finally - just for the record: The ENTIRE experience from DOE Reliability testing of lead cascades of the previous machine design (before AC-100, and which only had about 1/2 of AC-100 capacity) consists of 15,500 hours cascade testing (August 1982-June 84)... there were 1,300 machines in the GZEP building in Portsmouth of which 1150 were tested for about 1 months accumulated total(!) That's all of DOE full scale cascade reliability testing folks.... and with a machine far below the AC-100(!) output.

        DOE's schedule (before President Reagan killed the program) was as follows:

        - 15,500 hrs full scale cascade testing by June 1984
        - machine design freezing 4/1985
        - award the manufacturing contract 4/1987
        - begin commercial plant installation 4/1988

        Maybe you notice that DOE expected (4) years between design freezing and installation in ACP plant. USU now believes they can do this in (4) months... no more testing needed (?).

        Enough said....

    • Don't worry about tea, when this stock takes off I'll buy you a cup of tea since all your "options" lost your money. This guy post this posts in here hoping weak minded people will dump the stock. Do your selves a favor, research this company on your own. The extent of his knowledge runs as deep as the S&P ratings, if all you do is follow them you'll always miss the boat.

    • I really think you have no idea what you are talking about. The ACP reliability goals are EXCEEDING expectations, go listen to 1st Qtr. conference call put out by USEC. If you read an article dated months ago to arrive at your conclusion your a little behind the times. There is a reason why Usec is one of the most talked about stocks today, look into it. I don't give out free pointers. Ooops I already did when I told you to listen to their conference call.

    • "Couple this with Congressional collusion and confusion on the legality or progression of US dependence on nuclear energy"

      I'm not even sure what your point here is? Perhaps subdividing your thoughts into several sentences might help. Specifics might also help you get your point across.

      "Couple this with the failure of USEC to meet ACP reliability goals"

      Reference?

      It seems like they are on track, and on time with testing (from all I've read). Cost overruns and funding are the key issues (and not unique to USEC). Please provide specifics if you have information to the contrary.

      • 2 Replies to cow_4_beans
      • ACP met production goal of 350 SWU.....BUT...
        per last conference call - ACP did not meet reliability goals.
        So it's like saying, the centrifuge works fine.....BUT...not for long!

        The first piece of legislation proposed by the Bush administration was a National Energy Policy encouraging nuclear power. Congress has not acted on it. Instead it pushed taxpayer monies into ethanol & "green energy".

      • maybe it helps to explain in plain English what the total lack of RELIABILITY testing of USU AC-100 machines means in reality - since almost nobody on here seems to grasp the significance/magnitude of USU risk taking with ACP:

        - where/when competitors test a new machine generation in lead cascades (several hundred machines) for minimum 5 years.... USU has "lead tested" a handful machines (< 20) connected to each other (not a AC-100 lead cascade consisting of 240 machines... as the DOE milestone requires)... and for less than one year (!)
        - USU plans to "test" the first 40-50 AC-100 machines (still not a real cascade) early 2009 for a few months, and after that go ahead and produce 11,500 machines in a factory and with people who have never done this (prototype USU AC-machines were made elsewhere)
        - URENCO LES plant will have TC-12 machines to guarantee RELIABILITY for 20+ years operation
        (they do not install their new TC-21 which has been tested commercially in cascades for over 5 years by now...)
        - Japan (JNFL) did something similar as USU plans - with result that after 5 years their centrifuge plant is slowly selfdestructing....
        - USU ACP plant with 11,500 AC-100 machines which have seen less than (1) year of testing (and no REAL lead testing in a real 240 size cascade) is an ENORMOUS gamble/risk taking with investors money... and all because USU are so far behind and have no time to do a careful reliability test - that's the real issue people seem not to recognize (except for the real investors who are not forthcoming with their money for ACP unless USGOV backing...)

    • The follwing short rubbish from a Wendell...

      Urenco’s strong business profile underpinned by its contract visibility & excellent profit. S&P
      Only fools would invest in a company like USEC where contract invisibility remains paramount.... ...vs URENCO where even a US stock rating company like Standard & Poor's gives it...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 11 minutes ago

      2. Re: What could USU be liquidated at today?
      well...if there's $6 a share for shareholders.... ...figure that the creditors lawyers get a third..... ...figure that the shareholders lawyers get a third.... ...and...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 30-Apr-08 06:36 pm

      3. Re: DOE Funds, Not A Sure Thing??
      The simple fact that USEC produces such a SMALL percentage of nuclear fuel needs here in the USA is - 1. US lawmakers wish to acquire as much uranium material as this will insure that the US...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 30-Apr-08 06:32 pm

      4. Re: USU will hit 2 $ with such results! P/E 10 is there.
      India just signed up for $7.6 Billion dollar deal with Iran for gas pipeline. Details to follow in 45 days. US opposed to this pipeline (& has been for 20 years...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 30-Apr-08 06:19 pm

      5. Re: book value is 11 ??
      US government let Enron fail & it was HUGE compared to USEC.... Feds recently rescued Bear Stearns, but did the shareholders win....no USEC is a corporate...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 29-Apr-08 05:21 pm

      6. Re: "prettied-up" version
      Not Looking Good USEC now has $140M short term loan, but only shows $100M in additional plant Lots of deferred taxes Great that the new ACP produces 350SWU...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 29-Apr-08 05:14 pm

      7. Goin' bankrupt?
      Debt/equity ...unreal Latest preferred share deal.....bad news for common I do not own CBRX.
      Business & Finance > Investments > Stocks (A to Z) > Stocks C > Columbia Laboratories (CBRX) wendell3308 28-Apr-08 05:20 pm

      8. Re: Would Homer Simpson buy USU?...sure 'cause he likes DO NUTS!
      ....and anybody that buys USU knows that... 1. the bigger is better ACP centrifuge does produce 350 SWU 2. but it's reliability doesn't meet expectations ....almost...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU) wendell3308 25-Apr-08 04:41 pm

      9. Re: Institutionals have 114% of USEC!!!
      Don't worry...the SEC is hot on this case of counterfeit shares.... certain "deep throat" sources within the SEC have confirmed that.... sometime in the next decade or two, they'll be...
      Business & Finance > Investments > Stocks (A to Z) > Stocks U > USEC Inc. (USU)

 

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