Traders Cooperative

[Joe Stocks]

CLF earnings came out today. On the surface they looked bad. Looking under the hood they are much better. They announced a $1bil dollar buy back, or more than 10% of their market cap of $9.6bil. Ceo comment; "CEO comment: "With demand on the rebound, particularly in automotive, 2022 is set to be another phenomenal year for profitability at Cleveland-Cliffs. Based on our recently renewed contracts, we are now selling the vast majority of our fixed-price contractual volumes at substantially higher selling prices. Even at the steel futures curve as of today, we would expect to see higher average selling prices for our steel in 2022 than in 2021. As we look forward to delivering another stellar year in 2022 and with our limited needs for capex, we are now comfortable to implement shareholder-focused actions ahead of our original expectations.”

The covered call gives limits my upside, but gives me some downside protection if I am wrong.