Replies to post #29191 on The Rising Influence of Rising Affluence

[Mufaso]

CLF- I find it to be very bullish for a company when a short seller changes their mind on a stock from sell to buy. GLJ Research is a small firm that makes short and long recommendations (mostly short from what I can see on their website.) Apparently Barron's took note and had this piece yesterday:

Cleveland-Cliffs Gets Double Upgraded as Analyst Looks to Rotate ‘Out of Tech Into Value’

Gordon Johnson upgraded shares of Cleveland-Cliffs to Buy from Sell with a $27.20 price target, which implies a 23% increase from the stock’s closing price on Wednesday.

Johnson wrote in a research note Thursday that he believes interest rates are actually headed higher “as bond market investors demand higher yields to compensate for what we believe will be much higher than expected inflation.”

Higher interest rates aren’t good news for growth stocks such as big tech. Johnson believes these higher rates will likely drive investors out of tech and growth stocks and into value stocks.

Johnson also said he sees both a “Trump put” and “Biden put” on the steel sector for whoever wins the presidency in the upcoming election. In laymen’s terms, Johnson is saying that both presumptive nominees of their parties won’t let steel prices drop too far before stepping in and limiting overseas imports.

The analyst cited tariffs put in place by Trump during his presidency. He also cited Biden’s statement earlier this month that it is “vital” for U.S. Steel to remain an American steel company that is domestically owned and operated, in reference to its potential acquisition by Japan-based Nippon Steel . Both are reasons for optimism about the stock, the analyst said.

https://www.barrons.com/articles/cleveland-cliffs-double-upgrade-value-rotation-6628cf64

GLJ reasoning on interest rates may be flawed but the Trump or Biden put makes sense. Nevertheless, the idea that this short went straight from sell to buy is bullish for CLF IMO. (and it also makes me laugh a bit ;-) )

[DewDiligence]

CLF invests $100M—including $50M grant_from WV—to build new electrical transformer plant in Weirton, WV at the site of idled tinplate facility:

https://finance.yahoo.com/news/cleveland-cliffs-announces-state-art-110000609.html

Cleveland-Cliffs Inc. announced today that it will establish a new electrical distribution transformer production plant in Weirton, West Virginia.

…The total capital investment is $150 million, of which $50 million (or one third) will be granted by the state of West Virginia to Cliffs through a forgivable loan [i.e. a grant]. Cliffs expects the new plant to come online in the first half of 2026.

The efficiency standards for distribution transformers recently promulgated by the U.S. Department of Energy support the long-term utilization of highly-efficient American-made Grain Oriented Electrical Steel (GOES), ensuring the viability of this investment in Weirton.

This investment will result in reemployment opportunities for 600 USW-represented workers from the indefinitely idled Weirton tinplate mill (https://www.clevelandcliffs.com/news/news-releases/detail/622/cleveland-cliffs-to-idle-weirton-tinplate-facility ).