I know your are not Robert (the sheep herder), are you the orangutan? A member since today means only one thing, you are one of the bashing idiots on this board that I have on ignore.
If that was the case, then he would not have been able to read the debt structure or any of the financial statements. Matter of fact when they come out with a totally stupid remark like that, it tells me he never even opened the books at all. I blame CNBC for allowing people like them a platform to put out their views. No different than the media refusing to show a streaker.
If you look closely at the companies that have successfully driven shorts out of their stocks, very few of them have earnings as good as CLF. LVS should have went bankrupt, TSLA has a PE ratio that is in the ozone layer with absolutely no chance of getting down to CLF's current level, GMCR PE is not that great but they know how to build their brand in the media and then there is HLF which is winning even though they really are a pyramid scheme. All of these companies took on the shorts and won in the media and you continue to hear their names on the networks. It isn't because they are good, it is because they have a PR firm or department that know how to place them in the news.
I wish it was as easy as just running the company and generating good earnings, but in the world we live in with all the media sources at our finger tips, the battle needs to be fought and won in the media.
Lucetteo, I am totally on your side. The buyback will kick start the removal of shorts. But just like Musk with TSLA, you can't stop there, you have to take the show on the road to drive the shorts out for good. It is a war of words and media exposure that management needs to prepare for. If they can't handle it, hire someone that can. The company is solid so it shouldn't be that hard!
They have generated enough cash in Q1 to pay for 5 million shares now and another 5 million shares in Q2. I think a 1 million share announcement would come across as a weak move and be negative. I would rather they make a 20 million share announcement for 2014 now (doesn't mean you need to buy that amount).
I doubt you can even find a buyer for it. The only way CLF can get rid of it is to bundle it with other assets and sell it off as an IPO. Or just idle the mine, continue to service the debt and sell it when they can find a buyer for it. Without the revenue from the operation, CLF could continue to build cash, spend on a minimum amount of CapEx and pay down debt. Each path has merits, but no matter which one they take, they need to address the short position on their stock and take action now to correct it. A 10 million share buyback over the year is doable without taking on additional debt.
Impairment charges are used to reduce your tax exposure in the near term. Because it is used for taxes, companies tend to use them in Q4 unless they are trying to reduce their quarterly tax expenses. Also, most of the times these charges are amortized going forward and is another reason why they take them in Q4.
I agree with you on this one. After every earnings, CLF has taken out one of the reasons the shorts hang their hat on and then the shorts move to a different target point. Look at other companies that were successful taking out the short position did so by making a bold move that drove the shorts out, good earnings will keep them away. Each week we wait of that bold move by CLF's management...
"February 14, 2014 10:00 a.m.
Ministry of Northern Development and Mines
Ontario is taking another step towards the development of the Ring of Fire. The firm Deloitte LLP has been brought on to help establish the development corporation, which will be responsible for infrastructure in the Ring of Fire region.
Deloitte LLP will act as a neutral, third-party resource for key partners, including First Nations, the provincial and federal governments and industry.
Deloitte LLP will work with Ring of Fire partners to set clear paths and timelines for decision-making, create guiding principles for the development corporation, and seek consensus on the corporation's next steps.
Work is also underway to help partners build a common understanding of infrastructure needs in the region. A third-party research report will examine existing infrastructure proposals and establish a common technical basis to inform decisions to maximize the economic and social potential of the Ring of Fire region.
Building infrastructure and working collaboratively with First Nations on economic development is part of the government's economic plan that is creating jobs for today and tomorrow. The comprehensive plan and its six priorities focus on Ontario's greatest strengths -- its people and strategic partnerships."
Not all Asian sales are at spot with partners in these mines are the main consumers of the ore. If you track quarterly revenue per ton and the corresponding average spot price, the impact is about $2 or less. In 2013 Q3 we had a large run up in average spot of well over $10 and CLF had about a 60 cent change in revenue.
Ontario has hired a consulting firm to bring all parties together in forming the development corporation. The only cost I see for CLF is their contribution to this corporation to insure their access to the transportation network. In any case, Ontario is moving forward.
Let's hope they never access the revolving credit facility again! With over $300 million in cash and the nearest bond due in 2018, they should not have to borrow.
Last quarter was influenced by impairments and they have all year to write down the balance of the Wabush shutdown. The revolving credit was paid off last quarter and has been adjusted to make credit more available at lower cost.
I really don't see anything scary at all. The ridiculous -.17 is pulling down the average where an earnings beat will be easy. Plus the fact that CLF is getting the earnings out within 3 weeks of the end of the quarter tells me they need to get the good news out fast to get an upper hand on the Casablanca fight. CLF has one earnings shot prior to the annual meeting, so I expect them to throw everything they can into the books to make earnings look good. But look for Littlewood to adjust that -.17 estimate up before earnings is released.
CLF has cut their debt since 2013 Q1, cut their expenses and so I expect that we will see higher earnings for 2014 Q1. The average spot price of iron ore was less than $10 below from 2013 Q1 which will have less than a $2 a ton impact on CLF's revenue.
Steel demand in China is going to explode higher. China's problem has always been the amount of energy they have to import. Now they have discovered that China is sitting on nat gas reserves that are much larger than the US, but they lack the infrastructure to get to the fields as well as the pipelines to transport it where it is needed. They now can solve their pollution problems and reduce their energy cost at the same time.
May iron ore futures are up 8 yuan ($1.30). China going to increase stimulus which means infrastructure spending and increased steel demand.