The Rising Influence of Rising Affluence

[DewDiligence]

CLF is a dog...CEO is a whacko. It's a high cost player in a industry near the top of the current cycle. I think it's a short.

How long have you been following the company?

CEO Lorenco Goncalves is brash, but he does exactly what he says, which is refreshing for a public-company CEO.

Goncalves fixed CLF's balance sheet by divesting non-core assets, refinancing and reducing the debt load, and issuing equity at a good price, minimizing the dilution of existing shareholders. Not too long ago, most people thought CLF would file for bankruptcy.

Calling CLF a "high-cost" producer shows a lack of understanding of the US iron-ore market. In the Great Lakes region, where many of the blast-furnace steelmakers are located, CLF is the only independent supplier of pellets tailored to individual customers' needs.

Whether the current cycle for US steelmakers has peaked is debatable, but Trump's recent actions suggest that these companies may have several good years ahead.