Cliffs has had respectable earnings for the last 3 quarters and is forecast to do the same for 4th qtr. Yet, it's trading at a pe of only 9 while paying a dividend of $0.15 (2.5%) and there are an amazing 40+% of its shares sold short with a very high daily volume of 5%+. Moreover, iron ore prices have been solid for the last 6 months and are even edging up a little. What am I missing? Why isn't Cliffs trading at $30 pps and why is there so much bearish sentiment as indicated by the huge short positions? Seems like an opportunity. The only negative I can see is the uncertainty of the political situation in North Korea that has a chance of leading to war but even that seems like a small risk given the history and it also seems unlikely that China would throw in with North Korea in such a conflict.
There is talk of Cliff being booted from the S@P 500 due to its lowered market cap. And it comes from highly placed media, not posters on this board giving guesses. Hopefully, it'll only be a temporary drag on the stock.
The S&P 500 is just an index. Being booted from an index shouldn't be a drag on the stock unless it's being booted because it's facing bankruptcy or something. Moreover, the current Cliffs market cap $4.2 billion is comparable to new companies recently added (as of 12/2/13) to the S&P 500 such as Allegion PLC building products which also has a market cap of $4.2 billion.