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Steven Bauer
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My Biography: In 2001, I retired and now permanently reside in Mexico. After 5 years of managing my own affairs, I resumed my career in 2007 as a financial analyst / asset manager. My career began while in University as a – manual chartist for some wealthy Investors, who had a fancy math formula... More
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Investing Wisely
  • Cliffs Natural Resources, Inc. (CLF) – Buy / Sell / Hold – Or – Cash ? ? ? 1 comment
    Jun 16, 2013 1:32 PM | about stocks: CLF

    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.



    - - -

    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.

    I can help you with maximizing your profits - just ask. Any stock or ETF - Your Choice!

    - - -

    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?

    - - -

    Want more detail? Please read my Bio here in SA and spend some time in this URL about my Work / Profitability / Analytics and then -- Send me an Email with your thoughts or questions. I will respond personally and promptly.

    Smile, Have Fund "Investing Wisely,"

    Dr. Steve

    Stocks: CLF
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  • Andrew Heyl
    , contributor
    Comments (154) | Send Message
    You are right that it takes some courage to buy any miners at this time, unless you are a pure contrarian. However, it you're looking at fundamentals, Clf looks like all upside. The negative is the speculation that Iron Ore prices will keep going lower because of increased production, and decreasing demand in China. I am skeptical that an increase in production will happen for the simple reason that miners will stop and delay their expansion plans if prices collapse. Most of them already have indicated they are cutting back. Vale may be an exception, but I would guess that even Vale will cut back if prices get too low. Vale did back out of its potash project in Argentina when it became unprofitable. One also has to look at the mining equipment companies. If so much expansion is going on, why is Joy Global in the tank. Their profits should be soaring. Although it is now a bygone conclusion that every analyst is projecting a slow down in china, it is still growing at over 5%, and the leadership is indicating it still plans on moving about 500 million farmers to the cities in the next several years, in order to boost growth, and their per capita income. That means a whole lot of infrastructure and a whole lot of steel. Lets just be reminded that the US population is only 300 million. Think what would be needed to move that many people from the US to Canada. China is the one country that has the capability to do this. They certainly have the cash, and they don't have a dysfunctional government to stop them. The new leadership will be anxious to make a mark, and will be looking to do something big. The way to play CLF at this time is their recently issued preferred stock, which has been paying almost 10% in dividends and is mandatorily convertible to common in a few years. If you're a long term investor your only fear is a bankruptcy, and that appears unlikely, since CLF's mediam term financial issues have been resolved with it's recent capital infusion. It also recently signed a long term contract with one of it's major clients. In my opinion the potential upside clearly outweighs the downside.
    19 Jun 2013, 12:05 PM Reply Like
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