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.
Form 425 - Prospectuses and communications, business combinations
Source: Edgar (US Regulatory)
Commission File No.: 001-08944
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the Securities and Exchange Act of 1934Subject Company: United States Steel Corporation
Commission File No.: 001-16811
This filing relates to the proposal made by Cleveland-Cliffs Inc. (“Cliffs”) to the board of directors of United States Steel Corporation (“U.S. Steel”) to acquire all of the outstanding shares of U.S. Steel.
The following is an article published on Bloomberg News on August 15, 2023 that was posted on Cliffs’ website on August 15, 2023.
?
Forward Looking Statements
This report and the accompanying materials contain statements that constitute “forward-looking statements” within the meaning of the federal securities laws. All statements other than historical facts, including, without limitation, statements regarding our current expectations, estimates and projections about our industry, our business or a transaction with U.S. Steel, are forward-looking statements. We caution investors that any forward-looking statements are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on forward-looking statements. Among the risks and uncertainties that could cause actual results to differ from those described in forward-looking statements are the following: the risk that a transaction with U.S. Steel may not be consummated; the risk that a transaction with U.S. Steel may be less accretive than expected, or may be dilutive, to Cliffs’ earnings per share, which may negatively affect the market price of Cliffs common shares; the possibility that Cliffs and U.S. Steel will incur significant transaction and other costs in connection with a potential transaction, which may be in excess of those anticipated by Cliffs; the risk that the financing transactions to be undertaken in connection with a transaction have a negative impact on the combined company’s credit profile or financial condition; the risk that Cliffs may fail to realize the benefits expected from a transaction; the risk that the combined company may be unable to achieve anticipated synergies or that it may take longer than expected to achieve those synergies; the risk that any announcements relating to, or the completion of, a transaction could have adverse effects on the market price of Cliffs common shares; and the risk related to any unforeseen liability and future capital expenditure of Cliffs related to a transaction.
For additional factors affecting the business of Cliffs, refer to Part I – Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2022, and other filings with the U.S. Securities and Exchange Commission (the “SEC”).
Important Information for Investors and Shareholders
This report relates to a proposal that Cliffs has made for an acquisition of U.S. Steel. In furtherance of this proposal and subject to future developments, Cliffs may file one or more registration statements, proxy statements, tender offer statements or other documents with the SEC. This report is not a substitute for any proxy statement, registration statement, tender offer statement or other document Cliffs may file with the SEC in connection with the proposed transaction.
Investors and security holders of Cliffs are urged to read the proxy statement(s), registration statement, tender offer statement and/or other documents filed with the SEC carefully in their entirety if and when they become available, as they will contain important information about the proposed transaction. Any definitive proxy statement(s) (if and when available) will be mailed to shareholders of Cliffs. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Cliffs through the website maintained by the SEC at http://www.sec.gov.
This report shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
This report is neither a solicitation of a proxy nor a substitute for any proxy statement or other filing that may be made with the SEC. Nonetheless, Cliffs and its directors and certain of its executive officers may be considered participants in the solicitation of proxies in connection with the proposed transaction. Information about the directors and executive officers of Cliffs is set forth in its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 14,
2023, and its proxy statement for its 2023 annual meeting of shareholders, which was filed with the SEC on April 3, 2023.
Any information concerning U.S. Steel contained in this report has been taken from, or based upon, publicly available information. Although Cliffs does not have any information that would indicate that any information contained in this report that has been taken from such documents is inaccurate or incomplete, Cliffs does not take any responsibility for the accuracy or completeness of such information. To date, Cliffs has not had access to the books and records of U.S. Steel.
Cleveland-Cliffs’ (NYSE:CLF) $7.3 billion bid was rejected. Bouchard was revealed to have $10 billion in cash, with no debt at Esmark. He receives advice from an undisclosed international bank. US Steel invited Esmark to join the negotiation process.
Wednesday’s Wall Street Highlights: Intel, VinFast, Coherent, DLocal, Nu, Target, and more
Source: IH Market News
US index futures were broadly flat in premarket trading on Wednesday as traders await indicators such as Federal Reserve minutes and industrial production.
By 6:53 AM, Dow Jones futures (DOWI:DJI) were up 3 points, or 0.01%. S&P 500 futures were up 0.01% and Nasdaq-100 futures were up 0.06%. The 10-year Treasury yield was at 4.186%.
On Wednesday’s US economic agenda, investors will follow at 8:30 am the preliminary building permit for July, which is projected to have 1.46 million new orders. At 9:15 am, the industrial production data for July will be released, with the consensus predicting an increase of 0.30% on a monthly basis. At 10:30 am, the EIA releases last week’s oil inventories, which are projected to drop by 2.5 million barrels.
The great expectation of the day is for the minutes of the last meeting of the Open Market Committee (FOMC), which will be released at 2 pm. At its July meeting, the Fed raised interest rates to a range between 5.25% and 5.50%. The expectation on the part of investors is that the document will bring clues about the trajectory of interest rates, after the publication of recent data that are used as benchmarks for monetary policy.
Mortgage rates in the US hit a 22-year high, resulting in a 29% year-on-year drop in application volume. The 30-year average interest rate rose to 7.16%. Demand for new homes has increased, particularly among first-time buyers, driven by low-down payment options. Refinances have dropped due to rising rates.
In the UK, July inflation fell by 0.4% monthly, less than the forecast 0.5%. However, core inflation increased by 0.3%, beating the estimate of 0.2%. These figures raise concerns that the Bank of England could raise interest rates.
In the euro zone, GDP grew by 0.3% in the second quarter compared to the previous quarter, in line with expectations. Annual growth was 0.6%. Contrary to forecasts of a 0.10% decline, industrial production in June increased by 0.5% month-on-month.
In Asian markets, the declines reflect concerns about China’s economy, given recent disappointing numbers. In addition, JP Morgan (NYSE:JPM) raised its forecast for corporate defaults in emerging markets due to fears related to the Chinese real estate sector, compounded by the financial difficulties of Garden Country.
In the commodities market, West Texas Intermediate crude for September fell -0.01% at $80.98 a barrel. Brent crude for October fell 0.07% near $84.83 a barrel. Iron ore futures traded in Dalian, China, were up 0.52% at $100.95 a tonne.
At the close of Tuesday, global financial markets started the day on a downward trend, a trend that persisted until the end of the session. European stock markets reacted negatively to local economic indicators and tensions with China. The British job market showed robust figures, raising concerns about possible increases or maintenance of high interest rates. In China, retail sales and industrial production disappointed, prompting the PBoC to cut interest rates.
In the US, indexes took big losses for similar reasons. Retail sales beat expectations, while the NY Fed’s Empire Manufacturing Index signaled a sharp decline in August. The Dow closed with a loss of 361.24 points or 1.02% at 34,946.39 points. The S&P 500 closed down 51.86 points, or 1.16%, at 4,437.86 points, and the Nasdaq Composite lost 157.28 points, or 1.14%, at 13,631.05.
Ahead of Wednesday’s corporate results, traders are watching reports from Target (NYSE:TGT), Zim (NYSE:ZIM), JD.com (NASDAQ:JD), TJX (NYSE:TJX). After the close, results will be announced for Cisco Systems (NASDAQ:CSCO), Synopsys (NASDAQ:SNPS), Wolfspeed (NYSE:WOLF), Stone (NASDAQ:STNE), Paycor (NASDAQ:PYCR), among others.
Wall Street Corporate Highlights for Today
Apple (NASDAQ:AAPL) – Apple will start production of the iPhone 15 in Tamil Nadu, diversifying its manufacturing outside of China. Seeking to speed up deliveries, the company reduced the difference between Indian and Chinese operations. In addition to Foxconn, Pegatron and Wistron will also assemble the iPhone 15 in India. Apple expands its presence in India, benefiting from government incentives and sees a growing market.
Amazon (NASDAQ:AMZN) – Amazon Pharmacy will automatically apply discounts on over 15 insulin and diabetes medications. Patients will no longer need to manually enter manufacturer coupons. The aim is to facilitate access to insulin at reduced prices.
Intel (NASDAQ:INTC), Tower Semiconductor (NASDAQ:TSEM) – Intel and Tower Semiconductor ended a proposed $5.4 billion deal due to lack of regulatory approvals. Tower shares were down more than 10% in premarket trading on Wednesday. Intel will pay Tower a $353 million termination fee. US-China tensions impact tech deals. Pat Gelsinger, CEO of Intel, sought approval for the deal in China and said Intel will continue to invest in its foundry business. Intel’s foundry sales have grown, but demand for the chips has declined.
Nvidia (NASDAQ:NVDA) – Shares of Nvidia rose on Tuesday after two brokerages raised their price targets. The high reflects optimism with artificial intelligence and the demand for its components. Analysts raised price estimates ahead of Nvidia’s quarterly results. The company predicts higher revenue due to demand for its AI chips, like those used in ChatGPT.
ASML (NASDAQ:ASML) – Samsung halved its stake in ASML Holding NV in Q2, selling 3.55 million shares, raising $2.2 billion. Samsung plans to strengthen its chip manufacturing, rivaling Taiwan Semiconductor Manufacturing Co (TSM).
VinFast (NASDAQ:VFS) – Vietnamese electric vehicle maker VinFast soared on the Nasdaq, doubling its valuation to $85 billion, outpacing Ford and GM. The debut followed a merger with SPAC Black Spade. Despite initial slow sales, the company plans to expand and revise its distribution strategy. VinFast is developing a $4 billion factory in North Carolina and faces competition from Tesla and Chinese companies.
Thomson Reuters (NYSE:TRI), The New York Times (NYSE:NYT) – Company X, formerly Twitter, has temporarily delayed access to links from sites such as Reuters and The New York Times. The delay was noted and then removed. The action comes after Elon Musk, new owner, criticized certain news organizations. The cause of the delay remains unclear.
Occidental Petroleum (NYSE:OXY) – Occidental Petroleum has acquired technology provider Carbon Engineering for $1.1 billion to develop carbon capture sites. Direct air capture technology aims to remove CO2 from the atmosphere for various uses, such as in the manufacture of concrete and fuel.
Woodside Energy (NYSE:WDS) – Woodside Energy reports “positive progress” in wage disputes at its LNG facility in Australia, while unions indicate significant differences. Around 99% of offshore workers voted for union actions, which could affect LNG shipments and prices.
Chevron (NYSE:CVX) – Negotiations between Chevron, Woodside Energy (NYSE:WDS) and Australian unions on wages and conditions at LNG facilities may take time due to the need for unions to consult their members. Workers at several facilities consider the possibility of industrial actions, including strikes. Experts see low risk of prolonged outages.
US Steel (NYSE:X) – Esmark Inc CEO James Bouchard said he had the funds for US Steel Corp’s $7.8 billion bid after Cleveland-Cliffs’ (NYSE:CLF) $7.3 billion bid was rejected. Bouchard was revealed to have $10 billion in cash, with no debt at Esmark. He receives advice from an undisclosed international bank. US Steel invited Esmark to join the negotiation process.
TPG Inc (NASDAQ:TPG) – The TPG Capital group has expressed interest in buying a stake in Ernst & Young (EY) consultancy, according to the Financial Times. After regulatory concerns, EY considered splitting its audit and consulting units, but later abandoned the idea.
BlackRock (NYSE:BLK) – Investors such as BlackRock and Allianz own significant holdings in Country Garden, the Chinese real estate company facing default risk. Although records show large exhibitions, holdings may have changed. The company’s potential default could impact Chinese debt markets.
UBS (NYSE:UBS) – A court in Moscow has banned UBS and Credit Suisse from selling shares in their Russian branches following a request from Zenit Bank, which fears losses if they exit Russia over a 2021 loan related to Intergrain and subsequent sanctions.
Goldman Sachs (NYSE:GS) – Senior managers at Goldman Sachs openly criticized CEO David Solomon. John Waldron, chairman of Goldman, became the focus of attention, pressured to decide whether to support Solomon or differentiate himself. As dissatisfaction mounts over Solomon’s forceful leadership and unpopular decisions, Waldron struggles to find his place, constantly being watched for signs of falling out, according to Bloomberg.
Bank of America (NYSE:BAC) – The Argentine peso will face further devaluations, according to strategists at Bank of America. It is forecast to weaken to 545/dollar in 2021 and 1,193 in 2024. The recent 18% devaluation has caused increased demand for dollars in the parallel market. The situation intensifies political and economic uncertainty.
HSBC (NYSE:HSBC) – Bangladesh’s equity market, buoyed by rising consumption and foreign investment, could offer big returns, according to analysis by HSBC. Compared to India and Vietnam in past decades, profits are expected to increase by 20% over the next three years.
Boeing (NYSE:BA) – Boeing has appointed Alvin Liu, a former auto industry executive, as head of its China unit, aiming to improve relations amid geopolitical tensions. China is a vital aviation market. Liu replaces Sherry Carbary and has experience with Ford and Chrysler in China.
Southwest Airlines (NYSE:LUV) – Southwest Airlines has reached a tentative agreement with the union of 17,120 transportation workers, setting an hourly wage of $36.72. The contract also provides better retirement medical coverage, 401(k) benefits, and vacations at premium rates.
Fisker (NYSE:FSR) – Startup Fisker has reached an agreement with Tesla (NASDAQ:TSLA) to adopt its charging standard, allowing access to the Supercharger network by 2025. Many automakers are adopting Tesla’s design, predicted to lead the market, replacing the CCS standard.
Tesla (NASDAQ:TSLA) – Tesla has cut prices for its Model S and Model X in China for the second time this week, intensifying concerns about a price war in the auto sector. These cuts put pressure on other automakers, such as BMW and Mercedes-Benz, to adopt similar measures.
Avis Budget Group (NASDAQ:CAR) – Avis Budget was fined $275,000 by New York for failing to rent vehicles to customers without a credit card, in violation of state law.
Lordstown Motors (NASDAQ:RIDE) – Lordstown Motors has agreed to pay $40 million to Karma Automotive after being accused of stealing proprietary technology. The deal includes $5 million in royalties from Karma’s intellectual property. Lordstown faces bankruptcy and the case will go to trial in September.
Apollo Global Management (NYSE:APO), Yellow Corp (NASDAQ:YELL) – Apollo Global Management is selling a $500 million loan to Yellow Corp, waiving the financing extension. The loan was acquired by Citadel. Yellow reviews alternative loan offers and faces debt payments through 2024.
Alibaba (NYSE:BABA) – DingTalk, Alibaba’s platform, will separate from its cloud division, operating as a wholly owned subsidiary. Although rumors suggest a possible IPO, the date has not been confirmed. The separation will not affect DingTalk’s services or its technology collaboration with the cloud division.
Bain Capital (NYSE:BCSF) – Bain Capital has acquired Brazilian steakhouse Fogo de Chão for around $1.1 billion. The sale provided Rhone Capital with a triple return on its $560 million investment in 2018. Fogo, founded in 1979, operates in 76 locations globally.
Ralph Lauren (NYSE:RL) – Canadian regulator CORE is investigating Ralph Lauren’s Canadian unit and GobiMin for possible links to Uyghur forced labor in China, following complaints from 28 organizations. Similar investigations involve Nike Canada and Dynasty Gold.
Roku (NASDAQ:ROKU) – Roku and NBCUniversal have agreed to launch ad-supported channels for reruns of popular shows. This deal expands Roku’s free TV streaming and benefits NBCUniversal. Shares in both companies surged, outperforming the S&P 500. FAST channels, which offer ad-supported content, are a growing trend.
FedEx (NYSE:FDX) – FedEx is pushing its delivery service providers to beef up safety after a surge in accidents nearly tripled insurance costs over the past decade. The company requires the installation of cameras and sensors in vehicles and improvement in training. Providers with low safety scores may face competition on routes. This move aligns with CEO Raj Subramaniam’s plan to integrate company units. But contractors say FedEx doesn’t address high driver turnover, which can lead to more accidents. Safety has become a central issue for the company’s bottom line.
Earnings
Target (NYSE:TGT) – Target lowered its full-year forecast after quarterly sales below expectations. A drop in comparable sales and earnings per share between $7 and $8 are expected. While in-store sales improved in July, concerns about inflation and future trends persist. Second-quarter earnings beat expectations, hitting $1.80 a share.
Tencent Music Entertainment Group (NYSE:TME) – Tencent Music Entertainment, compared to Spotify, saw its quarterly revenue grow by 5.5% due to more subscriptions. However, it projects a drop in future revenue from tighter controls on live streaming, following China’s anti-gambling measures. The company reached 100 million paying users. Shares are up 1.78% in premarket trading on Wednesday.
Coherent (NYSE:COHR) – Coherent was down 21.8% in premarket trading on Wednesday after delivering lower-than-expected first-quarter and full-year forecasts. The company anticipates adjusted earnings of between 5 and 20 cents per share and revenue of between $1 billion and $1.1 billion, contrasting with analysts’ expectations of 47 cents per share and $1.17 billion in revenue. Coherent indicated that his estimate does not consider a significant improvement in the macroeconomic scenario, including in China.
DLocal (NASDAQ:DLO), MercadoLibre (NASDAQ:MELI) – DLocal reported a 24.77% increase in pre-market transactions after delivering better-than-expected quarterly results and confirming forecast annual revenue of between $620 million and $640 million. In addition, Pedro Arnt was appointed co-CEO of the company, having previously served as CFO of MercadoLibre, a major Latin American e-commerce player.
H&R Block (NYSE:HRB) – After reporting quarterly earnings of $2.05 a share, beating Wall Street’s forecast of $1.88 per share according to Refinitiv, tax preparers are holding steady premarket. H&R Block had revenue of $1.03 billion, above analysts’ estimate of $1.01 billion. In addition, the company raised its quarterly dividend by 10.3%, from US$ 0.29 to US$ 0.32, and also revised upward its forecasts for the full year.
Cava (NYSE:CAVA) – After releasing a second-quarter report with earnings that beat forecasts, shares in the Mediterranean restaurant chain rose 11.88% in premarket trading on Wednesday. The fast-casual company reported revenue of $172.9 million, above analysts’ forecast of $163.2 million, as per FactSet data. In relation to earnings per share, US$ 0.21 was recorded, contrary to the expectation of FactSet analysts who predicted a loss of US$ 0.02 per share.
Stride (NYSE:LRN) – Stocks were flat in premarket trading Wednesday after the education technology company reported better-than-expected results for the fiscal fourth quarter. GAAP earnings of $1.01 per share exceeded FactSet analyst expectations by 14 cents. Likewise, revenue of $483.5 million beat the estimate of $460.7 million.
AgEagle Aerial Systems (AMEX:UAVS) – The company reported in the second quarter a loss per share lower than that recorded in the same period of 2022. AgEagle had a loss of 5 cents per share, which is 2 cents lower than the previous year. However, the company’s quarterly revenue of $3.3 million was lower than last year. Stocks are stable in premarket trading.
Nu Holdings (NYSE:NU) – Nubank announced record revenue in the second quarter, adding 4.6 million customers. Revenue grew 60% to $1.9 billion. The CEO, David Vélez, pointed out that half of Brazilian adults are customers. The bank’s shares have rallied, rising 95% this year, and are up 3.92% in premarket trading on Wednesday.
Mercury Systems (NASDAQ:MRCY) – Defense stocks were down 12.83% in premarket trading on Wednesday after fiscal fourth-quarter results missed Wall Street’s forecasts. Mercury reported earnings of 11 cents a share, excluding certain items, and revenue of $263.2 million. By comparison, FactSet had analysts forecast earnings of 52 centsiui per share and revenue of $278.8 million for the quarter. Additionally, Mercury’s full-year estimates were below FactSet consensus expectations.
Palo Alto Networks (NASDAQ:PANW) – Palo Alto Networks surprised Wall Street by announcing quarterly results on a Friday after markets closed. Analysts are divided on what this indicates. The company, recently added to the S&P 500 index, may have a big DoD contract in the pipeline.
Beam Global (NASDAQ:BEEM) – Sales reached $17.8 million, up about 380% year-over-year and above the $13.5 million analysts projected. Beam is still unprofitable, but the company posted a loss per share of 32 cents, slightly better than the 34 cent loss Wall Street expected. Profitability is expected around 2026.
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.