Nader's slam on USU on alleged under-reporting of safety data at the two plants will weigh on this stock in the short term, but it sounds bogus as far as affecting earnings. I expect the uncertainty about a poss. justice dept. probe will limit the upside potential, at least until USU starts churning out those quality earnings reports and people wake up to the 7.55 pct. dividend...If it drops to $14 a share, I'm in.
The two enrichment plants are two of the safest plants in the US.
There is problem reporting to solve any safety/engineering incidents and work out a fix.
This was not always the case.... When DOE?DOD had the plants there was no NRC/OSHA/EPA. Today, all the eyes of the community/OSHA/EPA/NRC. The NRC inspectors stated, "follow procedures or get shut down, for we dont care if this place runs or not."
The Privatization Act has provision to allocate the liabilities between the Company and the US Government. Liabilities attributable to the Company's operations prior to the Privatization remain with the Government. Even if Nadar could prove the plants unsafe, chances are that the condition was inherited by the Company prior to the Privatization. It should n't cost the Company's future earning. The controversy may have a temperorary effect on the stock price - which will be good for us to accumulate more shares. Yes, the dividend is very attractive - I would have to buy some bank stocks from Chile to get that kind of return.
This is a great buying opportunity. Ralph Nader whines about nuclear power all the time. His accusations are primarily against the NRC for mishandling a problem which would not be solved until September, 1998. Hey! We made it! The only accusation against USEC he has made is that the prospectus didn't warn stock buyers about the dangerous conditions in the plants. The issue of whether or not there were genuinely dangerous conditions is a matter of opinion. Apparently, the NRC's opinion was that there was no signifigant danger. Unless he has bought shares and lost money because of this failure to disclose, he has no standing to complain to the SEC. Any stock which has held up in the market today (Dow down 200) is a good stock to own in this volitile market. This is a six year stock. To buy it with the idea of selling it sooner is to miss a great opportunity. Anyone who cuts and runs at the first whimper from Nader doesn't deserve the massive profits this stock will yield. The biggest problem will be paying the taxes on the fat dividends. The solution is to own it in and IRA or 401(k) so the dividends can build in a tax-free environment.