Cliffs Natural Resources, Inc. (NYSE:CLF) - Buy / Sell / Hold - or - Cash ? ? ?
This fine Company is one of the S&P - 500 component Companies that is what I call "A Tough Call." It is currently "Un-Favorable" - it has a clearly declining and negative Valuation and unfortunately it Technically it is on a LOW.
After you have years of experience in Forecasting it boils down to two criteria: "Favorable" and "Un-Favorable" - and - "Easy Calls" and "Tough Calls." I have learned that unless it is both "Favorable" and an "Easy Call" with Excellent Fundamentals and Technicals - I just move on until I find one that is. When you have a large universe of nearly all the quality and conservative Companies on the planet, it is often remarkable to Investors when I say: "There are always Excellent Companies that are both 'Favorable' and 'Easy Calls' at or around a Bullish Inflection Point. The reciprocal or opposite is true for Bearish Inflection Points.
The reason (CLF) is currently an "Tough Call" is because of its currently "Un-Favorable" Trend. It is currently selling at a low of $18 and has been in a strong descending Trend since early 2011. Just how much lower can it go? A Lot!
When making Formal Recommendations, I am looking for a "Probability for Profit" of at least 20% or more when I Recommend a security to my Clients or Prospective Clients. Here are two URLs that you may want to read about how I go about managing securities.
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Cliffs Natural Resources, Inc. -- (CLF)
Fundamentals: (Old-Fashioned Valuations Must be - in Place before Taking Positions). The projected Earnings Growth of (CLF) is clearly DESCENDING. Clearly - Poor Earnings have been in Sync with a Major Price Decline.
Technicals: The Indicators are all pointing to further decline in price. This will be a "Tough Call." Buying is definitely not prudent at this price.
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Opinion: HOLD - CASH, if you own Cliffs Natural Resources, Inc. (Cash in your money market account may bother you because of the low interest, but remember, you are more "bothered" when you lose money due to poor judgment on your part or from poor or misleading advice!)
Forecast: My Focus is to suggest that the price coming LOWER in the Short (one - three months). It - (CLF) is on a very early Bearish "Warning" and on my List to Sell. It has remained on my Sell List for over two years. HOLD - CASH for now? Please seek weekly Guidance from a professional. Remember - MOST "professionals" will advise holding or even buying. Do they EVER recommend selling or offer a Bearish "Warning" such as the above?
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