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Cliffs Natural Resources Inc. Message Board

  • tonyengel69 tonyengel69 Jul 15, 2013 9:46 PM Flag

    "CNBC" say's (CLF) Chapter 11 Read Why

    Cliffs could dive
    In direct contradiction to the bullish note struck by analysts at BB&T Capital earlier this week (where analysts upgraded Cliffs Natural Resources (CLF) stock on news of its CEO's departure ) a different banker announced this morning that it's not nearly so hot on the company's chances. Disagreeing with BB&T's analysis (but agreeing with my own), analysts at CIBC cut their rating on Cliffs from sector perform to underperform.
    Why might this be the right all, and BB&T's endorsement of the stock the right one?
    For the same reasons I outlined earlier in the week: Cliffs Natural Resources is not a profitable company. It might turn profitable next year ( or it might not ). But even if it does, the 4% consensus earnings growth projections of the analysts simply aren't strong enough to support the 10 times forward earnings valuation the share now carry. Not with Cliffs burning through cash at the rate of $500 million a year. Not while it's laden with $3.4 billion in net debt.
    Based on these facts, CIBC is right to turn to be pessimistic..

    Sentiment: Strong Sell

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