Cliffs Natural Resources Inc.

Cliffs Natural Resources Inc. (CLF - Analyst Report) recently hit a new 52-week high on better than expected Q4 results from mid February and rising estimates that project next-year earnings growth of 32%.

Company Description

Cliffs Natural Resources, Inc. is a mining and natural resources company that produces iron ore pellets, lump and fine iron ore and metallurgical coal. The company was founded in 1847 and has a market cap of $8.7 billion.

Fourth-Quarter Results

Revenue for the quarter, reported on Feb 17, was down 10% from last year to $820.5 million on a weaker pricing environment. The company did not however that it saw strong volumes from its Asia Pacific business. Earnings came in at 76 cents, doubling the Zacks Consensus Estimate of 38 cents.

Cliffs came out of the year in pretty strong financial condition, with $503 million in cash and equivalents, no borrowing under a $600 million revolving line of credit and $525 million in long-term borrowing.

With Cliffs posting solid results and saying it is optimistic on the macro-economic environment for 2010, analysts have raised guidance. The current year is up huge over the last few months, jumping to $5.19 from $2.87. The next-year estimate has advanced from $4.05 to $6.83, a bullish 32% growth projection.

Valuation

With estimates jumping, shares of CLF have some value, trading with a forward P/E multiple of 12X, a discount to the overall market.

The Chart

Shares of CLF have been surging since early February, recently hitting a new 52-week high at $67.53. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

Read the full analyst report on CLF