Cliffs Natural Resources (CLF): Capitalizing on the soaring price of iron ore

By Michael Cintolo, Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Report ?
From Cabot Wealth Advisory, 3/18/10. Sign up for free Cabot Wealth Advisory e-newsletter ??

Cliffs Natural Resources (CLF) is in a great position to capitalize on the soaring price of iron ore. A few analysts, in fact, have recently raised their earnings estimates to $7 to $8 per share this year, up from $1.19 last year!

The stock is exceptionally powerful–it’s risen from 40 to 67 on huge volume during the past six-and-a-half weeks. I think any retreat toward 60 would be attractive. ??

Editor’s Note: Cliffs Natural Resources is a Cabot Top Ten Report stock, hand-selected by Editor Mike Cintolo with the aid of OptiMo, our proprietary momentum stock-picking system. To get more of Mike’s top picks, along with both the technical and fundamental reasons why he likes these stocks now, try Cabot Top Ten Report today! Click here for more information.

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Cliffs Natural Resources (CLF): It’s iron mines keep getting more valuable

By Michael Cintolo, Vice President of Investments, Editor of Cabot Market Letter and Cabot Top Ten Report

For Cabot Wealth Advisory, 2/25/08  Sign up for free Cabot Wealth Advisory e-newsletter

Cliffs Natural Resources (CLF) is an iron ore producer that’s benefiting from voracious demand from emerging markets and it’s stock is not waiting around for the next bull market. The Cabot Top Ten Report’s OptiMo stock-screening system found the stock a few weeks back. Here’s what I wrote about the stock in Cabot Top Ten Report last week, when I named it as Editor’s Choice:

“With the developing world leading a global hunger for steel, Cliffs’ six iron-ore mines in Michigan, Minnesota and Eastern Canada, plus its controlling interest in an Australian iron ore mining company and a smaller one in Brazil, just keep getting more valuable. The company supplies iron ore pellets to integrated mines in the U.S. and Australia. It also produces large amounts of the metallurgical coal that’s used to make coke from its mines in West Virginia and Alabama. And finally, Cliffs has an agreement with a Japanese steel company to produce a new form of nearly pure iron nuggets from taconite that could really boost the bottom line. Tie this package together with a 0.6% dividend and a sprinkling of speculation that it’s a takeover target, and Cliffs looks a little less like a stodgy commodity company.”

I’m impressed with the stock’s tremendous volume patterns—it broke out to new highs above 105 two weeks ago on huge volume, and has already topped 125. Too extended to buy? Probably. But there have been many big-volume buying days of late, and I’m guessing any retreat likely won’t last too long. With the commodity boom in full force, I think CLF has a chance to be a good winner.


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Mike CintoloMichael Cintolo
Vice President of Investments and Editor of Cabot Market Letter and Cabot Top Ten Weekly

A growth stock and market timing expert, Michael Cintolo is editor of Cabot Market Letter and Cabot Top Ten Weekly. Since joining Cabot in 1999, Mike has uncovered exceptional growth stocks and helped to create new tools and rules for buying and selling stocks. Perhaps most notable was his development of the proprietary trend-following market timing system, Cabot Tides that has helped Cabot place among the top handful of market-timing newsletters numerous times.