Tags: Cliffs | Natural | Resources | CLF

Cliffs Natural Resources Set for Growth

By    |   Friday, 09 Dec 2011 03:17 PM

Cliffs Natural Resources (CLF) is a steel industry success story. Its revenues have surged 32.4 percent compounded annually from 2001 to 2010. And this iron ore mining player is largely an analyst darling, despite being in a highly cyclical industry.

The Ohio company mostly supplies pellets to steel companies. In 2010, the United States made up 42 percent of Cliffs’ revenues. But it’s also riding China’s stunning steel production growth. The Asian giant now accounts for 44 percent of global production output, versus just 18 percent in 2001. The result is that sales to China were 27 percent of Cliffs’ 2010 revenues.

Besides staking out fast-growing markets, Cliffs is adding acquisitions. It snapped up the Canadian company Consolidated Thompson Iron Mines this spring, adding 580 millon metric tons of iron ore reserves. Production rates are slated to double.

The result is that Cliffs is steeled for growth. Third-quarter net earnings surged 100 percent from a year ago. And revenues climbed 59 percent to a record $2.1 billion versus $1.3 billion. Higher iron ore prices, increased steel production in Asia and a stable market in North America helped drive the results, noted Cliffs CEO Joseph Carrabba.

More to come

Given heady growth, some analysts see Cliffs as undervalued. And of the 17 analysts followed by Thomson/First Call, five have strong buy recommendations and eight have buys, with four holds.

S&P has a strong buy rating and a $115 target price, noting Cliffs’ large market share in North America, consolidation in the global iron ore industry and higher steel consumption in Asia.

The company next reports on Feb. 15.

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Companies
Cliffs Natural Resources (CLF) is a steel industry success story. Its revenues have surged 32.4 percent compounded annually from 2001 to 2010. And this iron ore mining player is largely an analyst darling, despite being in a highly cyclical industry. The Ohio company...
Cliffs,Natural,Resources,CLF
267
2011-17-09
Friday, 09 Dec 2011 03:17 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved