Morningstar Rating

Stock Research and Analysis

by Daniel Rohr, CFA

Bulls Say

In the event Chinese steel consumption continues to grow at healthy rates, it will be difficult for global supplies of iron ore to keep up, setting the stage for an extended period of abnormally high prices.
The addition of Bloom Lake and renegotiation of the pricing mechanism with U.S. customers affords proportionally greater exposure to the seaborne market, allowing Cliffs to capitalize on a "stronger for longer" investment boom scenario in iron ore-hungry China.
Cliffs would be well positioned to grow in a strong iron ore price environment. Read more 

Bears Say

Cliffs' iron ore assets, while immensely profitable at bubbly seaborne prices, are high cost. Cliffs suffers significantly when iron ore prices decline.
With producing assets limited to iron ore and metallurgical coal, Cliffs doesn't boast a terribly diverse portfolio. Demand for both commodities is tied to the fortunes of the steel industry.
Despite record metallurgical coal prices, Cliffs' U.S. coal operations have struggled to turn a profit. From 2007 to 2013, the business segment averaged a $36 million annual operating loss. Read more 

Management

After its third-quarter earnings release, Cliffs announced it had appointed Gary Halverson to the newly created position of president and COO. Halverson, formerly interim COO at Barrick Gold, moved into the CEO role in the fourth quarter, taking over   Read more 

Profile

Cliffs Natural Resources is the largest producer of iron ore in North America, operating mines in the United States and Canada that supply nearly 50% of North American blast   Read more 

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