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Douglas E. Johnston  

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  • Time Is Running Out For Cliffs Natural Resources [View article]
    @dave - do we know if they have actually bought any stock back yet?
    Oct 7, 2014. 10:13 AM | 1 Like Like |Link to Comment
  • Time Is Running Out For Cliffs Natural Resources [View article]
    Your 3rd bullet states: "Management is wasting cash on buybacks"

    is there a filing that states they actually bought back shares?
    Oct 7, 2014. 10:08 AM | 1 Like Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    @dm - my understanding is they made out well on Mentor but that what I heard/read - not verified. They were kind of a one hit wonder coming into their CLF purchase and, like I said, its basically Drapkins/Taylors personal money (although they advise sep. accounts i think).

    I think it is a definite possibility that the company goes private, potentially with others involved (note Connell from first eagle bot a stake and he's been involved with take unders). That is why I thought a large margin of safety (i.e. dirt cheap) was needed before buying any.
    Oct 7, 2014. 10:07 AM | Likes Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    @stockbet - if u ask me i think it trades to $5 IF CLF does not execute on plan (e.g., cut div, close mines, maybe asset sales) and IO is 60 (remember it affects with lag). At $5, I could see a takeover backstop - the assets are just too juicy at that price. If they execute enough to get confidence back then $15+ is possible.

    DISCLAIMER: I MAY BE TOTALLY WRONG
    Oct 6, 2014. 02:17 PM | 1 Like Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    i think the thot was they could get big retail premium from an MLP issue - i always thought it was a bit of a pipe dream.
    Oct 6, 2014. 02:13 PM | Likes Like |Link to Comment
  • Cliffs Natural Resources: There's No Bottom In Sight [View article]
    @spoiled - its cashflow not earnings that matter at this point
    Oct 6, 2014. 02:07 PM | Likes Like |Link to Comment
  • Cliffs Natural Resources: There's No Bottom In Sight [View article]
    i think it is close to a buy (jm2c here). we bot a little late ytday at low 8s. I am going to save some powder to possibly buy more, prob via long dated calls, and i am also looking at their bonds. I think Q3 will be decent and could surprise some shorts. As a note aussie $ weakening doesn't hurt.

    I do think - and I am going to press them - that they should eliminate or reduce the dividend. This is no longer an income stock and to pretend otherwise is foolish. I think saving 145mn or say per annum and use the proceeds to shut down unprofitable mines. I would also like to hear they did not buy back stock. IMO, they did not and specs who thought they would got crushed in last couple of weeks.

    I have no idea when IO stabilizes - actually it seems like its settling in here ~80 which should give cliffs a 95ish realized on USIO eventually (12 months ahead) - remember that price adjusts w/lag. They've got time but they need to shut down unprofitable mines in the next 6 months.
    Oct 4, 2014. 05:59 PM | 2 Likes Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    i believe casablanca is effectively Drapkin's personal "hedge fund"
    Oct 4, 2014. 11:28 AM | Likes Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    The shameful part is their analysis looks totally wrong.

    Here is a Nomura quote: "At $78/tonne iron ore, CLF FCF after dividends in 2015 is forecast at negative $556mm. "

    You can't get to that number if you tried. A) they don't realize that USIO pricing is based on TTM + pellet premium B) they probably screwed up DD&A C) They are probably using stale costs.

    Having been a strategist on the street in a past life, the pressure to change your call is immense especially when you were so wrong (they were at $18 target). Suddenly, after you change your call, the sales force and traders want you on the phone.
    Oct 3, 2014. 02:55 PM | 1 Like Like |Link to Comment
  • Cliffs Natural Resources: There's No Bottom In Sight [View article]
    not much - i did buy a little CLF here low 8s. I think Nomura's analysis is blatantly incorrect and the thing about the SEC non-filing impacts casa not CLF...both are meant to inflame the downside i guess but earnings should be ok at the end of the month.
    Oct 3, 2014. 02:39 PM | Likes Like |Link to Comment
  • Cliffs Natural Resources: There's No Bottom In Sight [View article]
    Nomura's analysis looks blatantly wrong to me, not to mention changing your price target from $18 to $5. I guess they can claim victory. But seriously, using their $78 assumption, free cash flow will be ~100mn and ebitda 250-300mn. After div its minus 50mn - how Nomura gets -550mn is beyond me - i am guessing some junior spreadsheet jock forgot that DD&A is already in COGS. And that is not factoring in that USIO will have a gradual decline to that level as contract pricing resets quarterly with TTM IO prices. This quarter should actually be decent since they stated 8mn sales tons and a decent chunk is inventory workdown. If i was short, I'd want to be out before earnings.
    Oct 3, 2014. 02:37 PM | 1 Like Like |Link to Comment
  • EXCO Resources: What Just Happened? [View article]
    xco's bonds have been trading off..they are 94 offered 50 up
    Oct 3, 2014. 02:21 PM | Likes Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    since casablanca was the one that did not file, how would CLF be affected?
    Oct 3, 2014. 02:18 PM | Likes Like |Link to Comment
  • Cliffs tumbles amid WSJ story, 2-notch downgrade [View news story]
    Nomura is smoking some serious dope. First, they lower their price target from $18 to $5 and its based on incorrect modeling. There is no way you get to only 100mn ebitda and -550mn in FCF-div. I ran my numbers and at 78 IO, EBITDA is ~300mn and pretty flat on FCF-div. My guess is they don't realize that DD&A is in COGS since if you screw that up, u get to their #s....
    Oct 3, 2014. 02:03 PM | 3 Likes Like |Link to Comment
  • Cliffs Natural Resources: There's No Bottom In Sight [View article]
    one thing - the buybacks can be made from free cash flow in Q3 from the inventory drawdown (a seasonal thing) and inventory was high from winter effects. So they won't burn any liquidity with buybacks, if they do any. I wouldn't catch this falling knife, but risk-reward being short is not compelling. We've covered.
    Oct 3, 2014. 11:44 AM | 1 Like Like |Link to Comment
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