Image Source: Cameco Corporation    

What Happened?

Cameco Corporation's (NYSE:CCJ) stock price rose a respectable 10% last month. What's more, the gain was actually continuation of a move that began in early November. Indeed, the stock is up by more than 25% since the U.S. presidential election. All in all, the move made up for a great deal of lost ground experienced in 2016 -- it still gave up 13% of its value last year. 

So What?

Cameco's decline over the past 12 months speaks to the ongoing price weakness in the uranium market. In fact, during the company's third quarter conference call CEO Tim Gitzel explained that, "Uranium prices are at the lowest levels we've seen in over a decade..." Nothing material has changed on that front and the company didn't report any surprisingly upbeat news in November or December. The stock's advance doesn't appear to be grounded in a fundamental business change or in the uranium market.  

Which leaves investors' reaction to the election of Donald Trump in early November as the main driver of Cameco's price advance. The hope is that Trump will shift U.S. energy policy and be more supportive of nuclear power... or at least less supportive of clean energy like wind and solar, which would help nuclear compete.

Now What?

The problem here is that politicians have a history of saying one thing before an election and doing something else after getting elected. That's not to suggest that Trump won't live up to the market's expectations, only that you need to take what any politician says with a grain of salt. And investing solely based on changing political tides is an inherently risky endeavor. Cameco is a well run uranium miner, to be sure. But investors should buy it because they believe in the company, not because there's a new president waiting in the wings of the White House.