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Cliffs Natural Resources Inc. Message Board

  • neelsen01 neelsen01 Mar 14, 2013 8:47 AM Flag

    let's review the facts

    1. iron ore priced at $140 and should avg 125 throughout 2013. 2.sentiment is at all time negative for clf. 3.clf just raised a substantial amount of cash. 4 china demand not peaking until 2026. 5. china domestic mining costs high. 6. new mines becoming incredibly more difficult to fund and operate providing floor to iron ore .Professional shorts (chanos, einhorn) are depending on investors to panic at this point for final leg down (15?). only you the investor (not trader) can prevent that from happening. clf isn't going bankrupt. isn't going to be bought out cheap (under 30), and has been around for 165 years, so they have a history of getting through the "bust" times in this industry. not sure if we are even in a " bust" period , except psychologically.

    Sentiment: Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Reviewing the fcts doesn't help. Its the perception that clf has problems and mgmt is incapable of doing anything.

    • good post but gonna be too much surplus of iron ore unless world economy begins to grow fast.

    • those are the bull facts so lets review the bear (bare) facts
      1) just wrote off one third of book value
      2) just cut dividend after raising it several quarters before showing management doesn't even know its own business
      3) prospects for lower IO prices are high due to an oversupply situation
      4) costs are out of control
      5) prospects for an additional dividend cut are high, board should have cut it to zero when they cut it
      6) stock has been in a downtrend during an up market for two years
      7)other venues of investment are more profitable
      8) earnings prospects for out 6 months are negative
      9) costs of bringing on mines is higher than the return of the product
      10) $125 IO is a money earnings loser
      11) china demand may not have peaked but it is not high enough to take over the glut of supply
      12) clf just diluted the stock by 25% in order to meet loan stipulations on the 4 billion they owe and if they lose money they will have to dilute more
      Where you see positives on certain items I see them as negatives and so does the market, the cycle has not turned and to try to persuade others to lose money is not ethical. We have heard all the bulls for two years spout positives but I want to see them on the bottom line and in the board room

      • 6 Replies to rlbeard6734
      • RL,
        1)What are you using for BV? My math did not match a 33% write down.
        10)And why do you constantly decree they lose money at $125 IO? The average price in 4q was below this, and ex the write off they made profit...Not every ounce of production is associated with the higher shipping cost structure you have talked about.
        12)The dilution Common with greenshoe exercise = 6.9%, Preferred at maximum dilution during exercise according to JPM is said to be 14% without the greenshoe, or by my back napkin math with greenshoe would then be 15.1667%. So the maximum dilution here is 22%. Now if the stock is trading above $29 when the preferred converts that actually decreases the dilutive effect, and in turn could be 19.8% dilution.

        Sentiment: Hold

      • cutting the dividend was prolly the best thing to conserve the cash. What they MUST DO is to conserve the cash and let go a lot of people and make it lean and mean so they can make money even with IO at $75

      • This is one of Saner postings on this board.. Are you short this stock. what is your motivation to be on this board?

      • great points taken. on 1. smart to write off high costs assests for tax purposes, 2. dividend cut is confusing as it should not have been that high to begin with (mismanagement for sure). 3. market has priced in (and clf too) that iron ore will avg 125 for 2013 (may swing 100 to 150) 4. costs are high which provides the greatest opportuinity for improvement (activist investor needed here), 5. dividend cut not happening ( they may as well fire themselves if they do). 6. stock has high beta. the next leg up witl be just as relentless as on way down (bought in a 29.45 pt is 70!). 7.other venues of investment (presumed other miing stocks) are more stable but offers less beta on upside.8. earnings should improve as costs and high costs operations are curtailed. 9. the fact that new mines are more costly underlies the support for higher iron prices (less supply). 10. 125 io price is not money loser. clf costs will avg 95 to 100 this year. 11. china demand is not waivering. the government has had to take great efforts to suppress it! 12. clf dilluted shares by 7% of outstainging shares not 25% . but I concede this is negative. so yes this may be a bullish case in your view and it is a risky business, but one that will make it in my opinion. the price right now provides some amount of safety with substaintial upside for the inevitable upturn.

        Sentiment: Buy

      • Here is the thing, CLF actually made money last quarter, they took a non cash charge primarily for tax purposes. They will get tax refunds off an NOL that will add real cash to the books and without another non cash charge, they will make money.

      • Again, where does this "lose money'' come in, unless you buy now, panic and dump if it goes down another 50 cents to a buck. Why don't you park the doom and gloom and admit the obvious _ anyone who buys now and exhibits some patience will be richly rewarded. Stocks are meant to be held years, not hours.. Do you think your act is really dissuading true longs?

    • mlefkowitz@ymail.com mlefkowitz Mar 14, 2013 8:50 AM Flag

      Great post finally someone with common sense

      patience

 
CLF
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