From "BB-" and assumes that IO price will average $65 thru 2016. S&P also said that IO prices are near the bottom and once IO price start to go up, CLF''s rating can be upgraded . I think this is a big blow. It also said CLF MUST reduce cost further or reduce debt from asset sale or raising capital.
Restructuring cost about $75 mil and if during BK, someone wants to buy BL subsidiary it they may have to pay any Claims or make a deal about take.or pay rail contracts.
Have D/E ratio of 5 to 25or higher and still in business. CLF 's D/E ratio of around 2.5 .
When LG became the CEO of Metals, USA in 2003 , He took the stock price $3 to $22 in less than 2 years . He can do the same at CLF too.
$200 buyback at this price will easily reduce the outstanding shares by a tleast 20 % or by 33 mil shares leaving only 120 ml shares.
surf..all I am saying is that to me LG now looks like a
seasoned CEO who knows what he is doing and he turned around Metals,USA company in less than 2 years and took that stock from $3 to $22. He has also invested his own $1 mil in CLF stock..unlike Kirsch and Carraba.
Talking about the price of IO pellet, do you know I saw on the web site that in China 63% Fe IO pellet sells for $130/ton plus 17% Vet tax and 62% Fe IO pellet sells for $122/ton plus 17%Vvet tax . So selling 62%-66% Fe pellet by CLF in USA is a bargain for US steel companies and they probably know this.
I am try to find that info on the web site and post it ( China manufactured IO pellet) here .
Read the #1 PICK POST IN ALL ITS 5 SEGMENTS. You will get a better idea of LG's abiiity and CLF's
surf.. After having read the article in completion, I Now, feel more confident in his leadership of CLF. He took Metals,USA company from $3 to $22. Sorry I could not reproduce any Charts. I reproduced the article here in 5 segments,and is very interesting. Both Longs and Shorts should read them.
Lastly, his resume shows a track record of increasing shareholder value. In the two years after being named CEO of Metals USA in 2003, the share price of the company rose from $3.08 to $22.
I have not mentioned Cliffs' other operating segments, which are Eastern Canadian Iron Ore, Asia Pacific Iron Ore, and North American Coal. Although I won't go into an analysis of all of these, I see one of two things happening. One is that the price of iron reverts back to its 10 year average of around $100/ton, in which CLF would be cash flow positive in all of its iron segments. The increase in spot price may allow them to sell their assets for a higher price than they could currently get now.
If we are indeed approaching a cyclical low in the iron industry, and initiate a position is a company like CLF at the beginning of a cyclical bull market, we can take advantage of the inevitable increase in share prithat follows. Even a modest increase in the price of iron will catapult the stock to double or triple the level that it's at now.
In addition to the reasons that I've outlined above, a bet on Cliffs is a bet on America. A bet that Americans will continue to construct buildings, buy cars, and consume material goods. A bet that a century and a half old American enterprise has the resilience to survive a few strategic missteps. As Warren Buffett has so famously quoted, "it's never paid to bet against America. We come through things, but it's not always a smooth ride." At the present moment, Cliffs' path is bumpy, but it will survive. And once people realize that the sky isn't actually falling, CLF shareholders will prosper.
Please read all 5 segments of this article that was emailed to me.It says alot good stuff about to come for CLF.