Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Union Leader: Cleveland-Cliffs Is the Best Strategic Buyer of U.S. Steel
By Reuters
Aug. 14, 2023
FILE PHOTO: Steel workers at U.S. Steel Granite City Works in Granite City, Illinois, U.S., May 24, 2018. REUTERS/Lawrence Bryant/File PhotoREUTERS
By Bianca Flowers
CHICAGO (Reuters) - The United Steelworkers (USW) international president said on Monday that the union supports North American steel producer Cleveland-Cliffs' bid to acquire rival, United States Steel Corp, adding that the company is the best strategic buyer.
Cleveland-Cliffs said on Sunday that it offered to buy U.S. Steel in a cash-and-stock deal valued at $35 per share, which represented a premium of 43% to U.S. Steel's last closing price.
Good point. Also Lourenco Goncalves financing better be careful with rates where they are going. This company already has enough debt.
Cliffs said its offer to U.S. Steel received the support of the United Steelworkers union, the largest steel industry union in North America. Cliffs said it also prepared debt financing for the proposed deal from several banks.
https://www.foxbusiness.com/industrials/us-steel-rejects-7-3-billion-buyout-offer-cleveland-cliffs
Cleveland-Cliffs Stock Rises On Earnings, New Momentum?
Story by Gabriel Osorio-Mazilli, MarketBeat • Yesterday 9:59 AM
Cleveland-Cliffs stock outlook© Provided by MarketBeat
Cleveland-Cliffs (NYSE: CLF) shares rose by as much as 4.0% during Monday's trading session, which could have been taken as an optimistic expectation of better things to come. Some improving developments were coming up in the works as the company reported its second quarter 2023 earnings results, reiterating market opinions.
Regarding the momentum that the earnings expectations created, it is a sticky one. The stock is also trading higher during the pre-market hours of Tuesday morning, advancing by nearly 1.0%. Despite the small percentage move, investors can lean on a solid technical pattern that may extend the newfound upside momentum.
Markets are turning their heads away from Cleveland-Cliffs, enacting the stereotype that stocks are in a 'popularity contest' in the short term. However, for those investors looking for the highest upside potential, despite having to sit through a longer 'value investing' time horizon, Cleveland stock can be a clear prospect for a future purchase.
Understanding the Path
Cleveland-Cliffs stock has formed a chart pattern, which, combined with other factors, lays the foundation for a more extensive bullish run. Going back to the 2020 bottom price of $2.66 per share, a strongly supported uptrend has continued up to this day, leaving the stock to bounce higher after the latest test.
?
Cleveland-Cliffs stock chart© Provided by MarketBeat
The above image will showcase a tight uptrend channel in the stock, which has recently been tested and respected. Investors considering a possible investment in this reliable steel operator can rest assured, as they can still hop in at the lower sections of the channel and ride on the newfound momentum seen in earnings.
Furthermore, the purple line across the price bars will represent the infamous 200-day moving average. This reference level typically represents a strong inversion in previous price trends; otherwise, the mark of a new bear/bull market shall stock prices cross it.
?Related video: Wall St. ends higher as earnings season ramps up (Reuters)
Considering that Cleveland stock briefly crossed the 200-day moving average, coupled with the test of the bottom in the uptrend channel, a new inflection point has been made. Now that the moving average has been rejected and the uptrend support is being continued, investors can lean on this behavior and count it as the birth of a new rally.
The question now becomes, how does Cleveland-Cliff compare to its respective peer group, and what happened within the latest quarterly results that could have aided in the continuation of this new pattern confirmation? Following the same 'popularity contest' logic, looking at relative price performance can be a good start.
Competitors like United States Steel (NYSE: X) and Commercial Metals (NYSE: CMC) have outperformed Cleveland-Cliffs stock by as much as 52% during the past twelve months, a sign of which names the market has deemed popular. However, popularity and favoritism are cyclical beasts, and falling behind has only made Cleveland the highest potential name.
Turning the Ship
Within the quarterly earnings report, Cleveland management pointed to some future developments which may have been the cause of the stock's advance. Expecting further cost increases and a continued tailwind from the automotive shipping segments can all aid in margin expansion.
Despite posting slowdowns in the top and bottom lines, the company still generated enough free cash flow (Cash Flow from Operations minus Capital Expenditures) to repurchase up to $100 million of stock from the open market. Being able to repurchase stock during a slowing year can be a testament to a more significant characteristic.
A well-managed business can accurately plan and expect future capital needs, enabling management to manage the business' capital more effectively. Considering that the steel industry is highly capital-intensive, this tight grip on the vital signs of the firm can be a foreshadowing of what the business can achieve moving forward.
Management also pointed out a debt repayment of $550 million during the quarter, aiding the operational flexibility for the challenging quarters to come in the industry amid an uncertain economy. Cleveland also finished the quarter with total liquidity of $3.8 billion, marking the highest level in company history, reinforcing the ability to react to pivoting market trends swiftly.
Considering that Cleveland stock carries the lowest valuation multiples in the tight peer group, investors can rest assured that while it is not the most popular stock today, fundamental drivers will take the wheel and effect a rotation that values healthy and growing cash flows over popularity.
On a forward price-to-earnings ratio basis, which values the next twelve months of earnings rather than the past, Cleveland trades at 8.4x, significantly lower than United States Steel's 12.8x and Commercial Metals' 9.0x. Cleveland-Cliffs analyst ratings agree on a 23.4% upside from today's prices, reiterating that the stock carries the highest value potential in the space.
?
Cleveland-Cliffs Stock Rises On Earnings, New Momentum?0 Comments
?
Cleveland-Cliffs Inc https://g.co/kgs/wd4PGw
52 week high on 86K volume. Unbelievable.
Unbelievable the low volume
.
Which companies own the most shares of Cleveland-Cliffs Inc. (CLF)?
According to The Vanguard Group, Inc. filings, the company currently owns 50,553,900 shares, which is about 9.82% of the total CLF shares outstanding. The investor’s shares have appreciated by 923,207 from its previous 13-F filing of 49630693.0 shares. With the completion of the buy transaction, BlackRock Fund Advisors’s stake is now worth $683,544,460. SSgA Funds Management, Inc. reduced a -2.56% interest valued at $313.92 million while Fidelity Management & Research Co sold a -7,991,236 stake. A total of -347,651 shares of Cleveland-Cliffs Inc. were sold by Fisher Asset Management LLC during the quarter, and 150,571 were bought by Geode Capital Management LLC. In its current portfolio, Dimensional Fund Advisors LP holds 7,107,905 shares valued at $98.66 million.
In terms of Cleveland-Cliffs Inc. share price expectations, FactSet research, analysts set an average price target of $20.39 in the next 12 months, up nearly 12.69% from the previous closing price of $16.86. Analysts anticipate Cleveland-Cliffs Inc. stock to reach $27.00 by 2023, with the lowest price target being $17.00. In spite of this, 13 analysts ranked Cleveland-Cliffs Inc. stock as an Overweight at the end of 2023.
Cleveland-Cliffs to Announce Second-Quarter 2023 Earnings Results on July 24 and Host Conference Call on July 25
Source: Business Wire
Cleveland-Cliffs Inc. (NYSE: CLF) will announce its second-quarter 2023 earnings results after the U.S. market close on Monday, July 24, 2023.
The Company invites interested parties to listen to a live broadcast of a conference call with securities analysts and institutional investors to discuss the results on Tuesday, July 25, 2023, at 8:30 am ET. The call can be accessed at www.clevelandcliffs.com and will also be archived and available for replay at that address.
About Cleveland-Cliffs Inc.
Cleveland-Cliffs is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, Cliffs also is the largest manufacturer of iron ore pellets in North America. The Company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. Cleveland-Cliffs is the largest supplier of steel to the automotive industry in North America and serves a diverse range of other markets due to its comprehensive offering of flat-rolled steel products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs approximately 27,000 people across its operations in the United States and Canada.
?
View source version on businesswire.com: https://www.businesswire.com/news/home/20230710934435/en/
MEDIA CONTACT:
Patricia Persico
Senior Director, Corporate Communications
(216) 694-5316
INVESTOR CONTACT:
James Kerr
Manager, Investor Relations
(216) 694-7719