CLF stock was selling for 100. Now its 24.50.The Dow Jones is hitting new highs. The economy is recovering. Building (construction) is on the rise. Interest rates are low. Why is CLF such a poor performer at this point in time.
IMO it is because it is in a cyclical business that moves in cycles that don't correspond with the market necessarily, It is not just CLF but almost all mining stocks as they expanded greatly as they always do when prices rose dramatically, they also agree to wage concessions unreasonably when those prices are rising and they overextend in some situations as here. then inevitably follows the flush out and the price collapse of the commodity and you pay for over expanding, it will eventually come around but it will be over a year away at best before mines are closed, financials are better and mining commodities are better, the high cost mines close.
well yes and no. mining is a risky business in itself. you have invest in what you see is the future and hope to run down your debt by an expected rise is earnings / profits. this can turn on you fast. as the great buffet once said, when the tide goes out you see who has no pants on. now rl when you compare CLF v. any miner you want, it has massively outperformed to the downside. whats that tell us? they re voting on management, the position they are currently in, and their ability to turn the ship.
Clearly a disconnect between the stock performance and the price of I/O. Interstingly the spot price dropped to 148.25 today and most of the miners are in the green, I think I/O producers are all going to pop with the Q1 results. I/O prices have remained above $150 per tonne in Q1. Much better than the $112 in Q3 and the $122 in Q4. Unless the company comes out and raises guidance (never see them do that) or the analysts start upgrading or raise the concencus. This thing will stay range bound @ 6-8 times trailing earnings.