They will focus on the 6% production cut in USIO and the lower than expected revenue. The biggest headwind in their thesis is IO is on the rise and there seems to be capitulation on the part of the big Aussie miners. If the US can curb imports then they'll have nothing.
Small? Its roughly an 8% reduction in total debt with only financing activities. That isn't horrible - you're right there has been lots of assumptions about debt being bought back but much of that was modeled out using the latest credit line as another source to do so. As it turns out that hasnt been touched and I think many of us considered the ~2 billion debt outcome a best case scenario. We all know that they are trying to strategically buy back debt when the market offers them significant value to do so 10:7 or better.
Hmmm..so then you can't be both short and on a message board? They are somehow mutually exclusive? It seems to be there are plenty of shorts on this board....so foolish.
Do you even understand what the word thesis means? Take your 6 short and enjoy...the trend is slowing and will turn sooner rather than later. BHP is already cutting back and RIO's CIO increased pellet production.
BHP is scaling back production according to the latest reports - google it, but here is an excerpt:
“It is probably more a symbolic posturing position by BHP, but it also likely signals the bottom of the iron ore market, given this action is being taken by one of the lowest cost producers,” said Mark Pervan, head of commodities for ANZ Bank.
Also, RIO's Canadian pellet operations reported an increase of ~10% in shipments and most of that goes to the US so CLF's numbers this Qtr should be decent at worse. I am guessing some of the lost capacity by integrated producers will end up going to miners. Another reason to doubt CS's thesis on ore and CLF's. Doesn't make the least bit of sense when you start looking at the what's happening in the industry and trying to makes sense of their nonsense.
I've heard several rumors about this that have yet to be substantiated, however if true....I agree. There is a settlement coming and it will be HUGE!
Vale doesn't have that big of a presence in Canada and if anything, they wanted in on the US market, they'd be better off buying CLF's assets. CLF's cost of pelletization is the cheapest in NA as far as I know and shrinking. I wouldn't be surprised if VALUE bought CLF's for ~3 billion once their debt was in the 1.5-1.7 range.
Lish - don't argue with him - he's a zealot spewing the same nonsensical propaganda he always does. The only general point he speaks of that holds any water is the debt and falling ore - the later of which CLF's is insulated from. We know that steel isnt going away in the US and demand is increasing in the second biggest consumer of the product behind China - dumping is a problem but one that can be mitigated through value add. cost cutting and improved quality. There are only certain markets willing to use Chinese produced steel. The automotive market doesn't use much of it and we don't use it for infrastructure outside of maybe tubing but even then it's only 15%. The USIO is more than enough to support debt and earn cash even at $40/ton and we know SBIO couldn't go much lower BHP and RIO are already facing tiny margins and Australia is hemorrhaging tax dollars by the week. With an improving debt picture (as seems to be the case) CLF's is probably the best IO commodity player in the world.
lish - where did you read this and how are you evaluating the quality of the their fines? We know from the 10Q's and CC's that ASIO is relatively pure ~62% content and we know that SBIO spot is based off of that - just curious if either CLF's is generating some premium for better fines or if the others are getting some value less than 62 spot?
Even the lowest cost miners are now fighting for shrinking market share, govt subsidiaries in china preventing attrition an now at best 20/ton margins. LG maybe right - Australia may suffer greatly in terms of tax and GDP.
you should write a book on the super informative and technical "it legs down in bunches" strategy. I am sure your short but brilliant in depth analysis will open to rave reviews. Here is a quote: "take a handful of handpicked data points and regress them, wait that is too technical...just look at them and if it looks like a bunch and in a direction...hell just say it's going down" you''ve got a winner. So again to the contrary this also legs up in bunches - I suppose. The trend doesn't follow the fundamentals - last qtr they made $1/shr non GAAP and ~700 million EBIDTA for the year. There is a floor to their pellets which generate over 80% of revenue and currently trade at 85/ton which is ~$35 over cost. Their debt picture should be better by another 20% this quarter based on filings - so I'll stick with that, dummy.
I agree given the current circumstances of the exit I am guessing it isn't rosy at a minimum it isn't great. On the flip side it is a leg up in terms of companies but unless he was heavily recruited or knew someone there - leaving on his own is not a great sign.
"This legs down in bunches" yeah great observation of a trend that isn't a trend. Does this mean it also legs up in bunches? Because there is certainly moves to the contrary. Stop wasting my time with your foolish anecdotal diatribe and learn to speak/type english.
Sure - delusion. 3 based on your copious amounts of empirical data you've provided. I am not your friend. 15 or 150 is just as arbitrary as your 3 - however, I doubt you'll understand that in the least. Stay clueless buddy.
Yes 3 - just pull that number out of the air or did you refer to your IQ to get that number? More mindless posting and nonsense - as a percentage of EBIDTA CLF's is trading well below VALE, RIO and BHP - by those metrics it is CHEAP and should be 15/shr. So what makes more sense short here for .50 or buy for 300%. Math isn't your strong suit - we get it!
Surf - l am long and certainly appreciate most of the stuff you post - you clearly do your homework and spend the time to get data most of us are too lazy to uncover but I have to disagree here. I am not saying you are wrong or that it isn't possible but it just doesn't seem plausible both from my experience and from what I have witnessed third hand. Again, the tell tale sign will be if he leaves for greener pastures or just leaves. My guess is he was forced out but either way i just don't see any connection to his resignation and the sale of assets - maybe I am inexperienced but I have a hard time seeing it. A smaller leaner company still needs a chief accountant and unless the downsizing was directly affecting him - i.e. lower salary, smaller bonus and few RSU's I don't see why he'd leave on his own. As I said I suspect he was squeezed - he was part of that mgmt team that took on all this debt and expanded without rhyme or reason. He should be gone but a minimum paid an hourly salary equivalent to laborer 20/hr, no bonus and no stock. He's worthless!
That is a broad and subjective statement. Executive teams are always in flux when new leadership comes aboard. You clearly have no experience in this area. Read my post to surf and that should explain it for you. I am guessing he was forced out as part of cost savings as well as much of this mess was on his watch. He deserves to be gone one way or another but whether it's on his on or not is yet to be seen. If he takes a lesser job or there is no job he was most likely forced out.