Great Call on E*Trade! What's Next?

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Although it's hard not to fall in love with the stock-trading baby in E*Trade's (Nasdaq: ETFC) commercials, the stock has been anything but loveable over the past year.

The company dove into the mortgage business with both feet at a terrible time and ended up saddled with huge losses. In fact, the company is still slugging it out today thanks only to a hefty investment from Citadel Investment Group.

On CAPS there are more than 2,000 investors who are currently predicting the fortunes of this battered stock. But so far none of them has had E*Trade's number like CAPS All-Star jwfoster. jwfoster has made three short term calls -- all bullish -- on E*Trade since August of last year and has earned a whopping 125 points on those calls.

Player jwfoster is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and has managed an impressive stock-picking accuracy of 76% on his calls, while racking up more than 3,500 points. And E*Trade hasn't been his only great call.

Here are some of his other prescient picks:

Company	Date Picked	Call	Points	CAPS Rating
Oilsands Quest (AMEX: BQI)	7/3/07	Outperform	130	*****
IndyMac Bancorp (NYSE: IMB)	3/9/07	Underperform	91	*
Countrywide Financial (NYSE: CFC)	3/9/07	Underperform	82	*

Data from CAPS.

So what is this investor looking at these days? Here are some of his recent calls on CAPS:

Company	Date Picked	Call	CAPS Rating
Cameco (NYSE: CCJ)	5/2/08	Outperform	*****
Bucyrus International (Nasdaq: BUCY)	5/2/08	Outperform	*****
Penn West Energy Trust (NYSE: PWE)	5/2/08	Outperform	*****

Data from CAPS.

While not all of these picks may pan out, they could be a good place to start further research. I decided to take a look at Cameco.

The money-making strategy
Although the market has been struggling since it took a turn south last October, investors could have done much better by doing exactly what jwfoster has done. That is, shorting the financial and real estate companies while going long on energy and commodity stocks.

But while Bucyrus and Penn West have been putting smiles on their investors' faces, Cameco has been struggling; it's about 30% off its 52-week high. Cameco's business is selling uranium, but it can't blame its problems on the lackluster uranium market because of long-term contracts with its customers that protect it from prevailing market prices. Instead it's facing rising production costs and a good amount of uncertainty around a few of its big production projects.

CAPS investors have been undeterred as they look to the potential for Cameco. One of CAPS' top players, pencils2, rated Cameco's stock an outperformer back in January and cited several reasons for future outperformance, including the following: "Nuclear power is more and more becoming the most plausible clean, cheap energy option for countries everywhere. Nuclear power is climbing up the ranks and Cameco is in a good position to benefit from nuclear expansion."

Of course, nuclear power has some downsides that, say, solar power doesn't. And as pencils2 also noted, political foot- dragging on nuclear power is a big risk for Cameco's growth.

However, as the cost of fossil fuels -- in both dollars and environmental impact -- continues to rise, the antinuclear crowd in Washington may be forced to reconsider its stance.

And you, what's your take on Cameco? Get in the action by clicking to CAPS. CAPS is absolutely free and already has more than 110,000 stock pickers chipping in to find the best stocks out there.

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