$Cliffs Natural Resources(CLF)$hello to all my followers. I have bought this stock at an average price of 21.00. I believe the margins and revenues will grow for 2-3 more quarters. If you agree with me, after reading the companies fundamentals, like and share this post.
Strengths:
Vertical integration after recent aquisitions. This company can either choose to sell iron ore or make it into steel and sell stell. Currently iron ore peices have rocketed down and steel prices (hot rolled coil) has remained high but steady.
Companies like nucor (NUE) only produce iron ore and therefore taking a big hit. CLF has smartly capitalised on this and has been selling steel at marked up prices.
Adding to this, is the companies forward growth and cashflows. Currently, as anyone would agree, the companies fundamentals have been shaky. However, looking at future growth and cashflows model, we get a derieved average of 33.86. Any price under that is undervalued for this business in the short term.
Weakness:
Dependency on steel prices. Eventually, tapering and tightening policies would reduce inflation and steel prices. Adding to that, tightening would likely reduce economic growth, therefore steel demand would not be there. All this may crash steel prices. When this bull marker ends, commodities would be the first to crash.
Overall, I believe Powell will likely delay tapering and increase in interest rates. So, in the short term, i remain bullish. The companies earnings should help it rocket to 25-28 range again. After hitting 5 year resistance at 28, (likely co incide with the slow down of the bull market), i am not so bullish anymore.
So buy the dip, but do it cautiously.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
they have an excellent CEO Gonsalves! steel sheets and its finsihed products will be definatly needed for infra structure , car manufacturing, bridges, construction like that