The Perfect Storm Has Arrived, What are your top 3 reasons why no pop yet?
The tide has turned. Everyone on this message board and recent articles from industry experts seems to agree. It is a matter of time for the CLF rocket ship to take off. Higher Iron Ore Prices, Robust Auto Sales, Undervalued Stock, Possible Takeover Candidate, Highly Valued Assets, Controlls 30%-40% of the U.S. Iron Ore Market. I am all in myself. If there was ever a time to take off it would be now so please give me your top 3 reasons why it has not and when you think it will. After earning perhaps? Takeover rumors become more heated? Even hire iron ore prices? Until the shorts disappear?
IMO the most important reason the stock hasn't popped is the sell-side analysts' forecast for lower earnings next year and beyond due to increasing supply, especially in Australia. That's why they were pretty much able to blow off last quarter's impressive beat. This quarter earnings expectations have been dropping over the last few weeks. That's not helping.
Look for news on BHP and RIO's massive expansions, especially about how much they're willing to commit to financing these expansions. Both need to ante up billions further by the end of the year if they're going to keep their plans on track.
Next week's earnings and CC will be important. Especially any info we can get on sales and pricing going forward.
Perhaps its because fundamentally stronger and larger Rio Tinto has also been depressed. It is now beginning to show renewed strength. As this bell weather begins its ascent, the street will realize that things have turned around in iron ore and then interest will commence for Cliffs also.
I agree with you that this stock is vastly underpriced. It should go up but not until after earnings. My reasons why this stock isn't popping is:
1.) Negative sentiment controls the stock right now. Even with the positive news there is still no one buying the stock look at the RSI and the share volume.
2.) This company has had poor sales volumes for the last 4 quarters. The sales were so poor that the dividend was slashed significantly.
3.) This company is carrying a lot of debt. That being said I am looking forward to the conference call because the Share Offering was used to pay down a significant part of the debt. Some $700 million or 20%.
Hindsight being what it is I don't think it matters if the stock beats or misses this earnings period. I think sentiment has shifted and the worst is over I look forward to what the company says about the future. Demand is back, pricing continues to improve, and the company is lowering debt while continuing to advance projects. This stock will be over $50 in a couple of years. If anyone has a 401K buy buy buy.