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Cliffs Natural Resources Inc. Message Board

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  • w999surf w999surf Feb 12, 2013 6:58 PM Flag

    lets see... $36 M in cash, over $5 B in debt? lowered dividend... HMMM

    Lets see, according to the balance sheet they have $195 million in cash and $105 million in tax refunds due. Then with the $1.2 billion loss, they should be able to process an NOL to capture another $300 million in tax refunds or reduce their future tax liabilities. Their long term debt is no way near $5 billion and will be paid down through their preferred and common stock offerings.

    They beat on both the top and bottom line estimates and are taking the right steps to build their business as the recovery gains steam. It is clear the sellers are not reading the full results.

    Sentiment: Buy

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    • I totally agree. I quickly checked the numbers for 2013 and they appear to be inline if not slightly better than forecasts at least on the revenue side. The question is what discount do you value the stock with the cut in dividend (expected and should be viewed as a positive) and the issue of new stock?

      • 1 Reply to rayguy222
      • I agree, cutting the dividend should be good for the price. The issuing of new stock is a problem unless it is used to pay off debt. By increasing the stock float and decreasing debt by the same amount should give you a net-net in the short term. By eliminating interest payments, that should have a positive effect on the bottom line.

        The problem today is simply the headlines! They are going to drive the stock price over the next few days and then it will turn around.

    • They did NOT beat the bottom line. Read into the income statements. The EPS $0.62 included $0.21 from business discontinuing. So the actual EPS for operation is only $0.41. The street estimate is $0.58.

 
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