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5 Reasons to Add Cleveland-Cliffs Stock to Your Portfolio Now
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We are optimistic about Cleveland-Cliffs Inc.’s (CLF - Free Report) prospects and believe that the time is right for you to buy the stock as it holds promise and will sustain the momentum.
Let’s delve into the factors that make this mining company an attractive choice.
What Makes CLF an Attractive Pick
Solid Rank & VGM Score: Cleveland-Cliffs currently sports a Zacks Rank #1 (Strong Buy) and carries a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be the appropriate investment proposition at the moment.
Strong Q2 & Upbeat Outlook: Cleveland-Cliffs reported net earnings (attributable to shareholders) of $165.1 million or 55 cents per share in second-quarter 2018, up from net earnings of $31.8 million or 10 cents in the prior-year quarter. Adjusted earnings of 76 cents for the quarter beat the Zacks Consensus Estimate of 56 cents.
For 2018, Cleveland-Cliffs has increased U.S. Iron Ore volume expectation to 21 million long tons from 20.5 million long tons on the back of strong demand. It expects to sell 6-6.5 million long tons in the third quarter. Production volume expectation remains unchanged at 20 million tons.
Estimates Moving North: The Zacks Consensus Estimate for earnings for the third quarter and 2018 has been moving up over the past month. In this period, earnings estimates for the third quarter have moved up 7.8% to 69 cents and the same for 2018 surged 40.5% to $2.15.
Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value mining stocks, Cleveland-Cliffs is currently trading at trailing 12-month EV/EBITDA multiple of 9.7 compared with the industry average of 20.2.
Price Performance: Cleveland-Cliffs outperformed the industry it belongs to in the past three months. The company’s shares have increased 13.7% against the industry’s decline of around 13.6%.
Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have returned 22.2% in a year.
Ingevity has an expected long-term earnings growth rate of 12%. Its shares have surged 75.2% in the past year.
Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 18.9% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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5 Reasons to Add Cleveland-Cliffs Stock to Your Portfolio Now
We are optimistic about Cleveland-Cliffs Inc.’s (CLF - Free Report) prospects and believe that the time is right for you to buy the stock as it holds promise and will sustain the momentum.
Let’s delve into the factors that make this mining company an attractive choice.
What Makes CLF an Attractive Pick
Solid Rank & VGM Score: Cleveland-Cliffs currently sports a Zacks Rank #1 (Strong Buy) and carries a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be the appropriate investment proposition at the moment.
Strong Q2 & Upbeat Outlook: Cleveland-Cliffs reported net earnings (attributable to shareholders) of $165.1 million or 55 cents per share in second-quarter 2018, up from net earnings of $31.8 million or 10 cents in the prior-year quarter. Adjusted earnings of 76 cents for the quarter beat the Zacks Consensus Estimate of 56 cents.
For 2018, Cleveland-Cliffs has increased U.S. Iron Ore volume expectation to 21 million long tons from 20.5 million long tons on the back of strong demand. It expects to sell 6-6.5 million long tons in the third quarter. Production volume expectation remains unchanged at 20 million tons.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. Price and Consensus | Cleveland-Cliffs Inc. Quote
Estimates Moving North: The Zacks Consensus Estimate for earnings for the third quarter and 2018 has been moving up over the past month. In this period, earnings estimates for the third quarter have moved up 7.8% to 69 cents and the same for 2018 surged 40.5% to $2.15.
Attractive Valuation: Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value mining stocks, Cleveland-Cliffs is currently trading at trailing 12-month EV/EBITDA multiple of 9.7 compared with the industry average of 20.2.
Price Performance: Cleveland-Cliffs outperformed the industry it belongs to in the past three months. The company’s shares have increased 13.7% against the industry’s decline of around 13.6%.
Other Stocks to Consider
A few other top-ranked stocks in the basic materials space are Huntsman Corporation (HUN - Free Report) , Ingevity Corporation (NGVT - Free Report) and Celanese Corporation (CE - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have returned 22.2% in a year.
Ingevity has an expected long-term earnings growth rate of 12%. Its shares have surged 75.2% in the past year.
Celanese has an expected long-term earnings growth rate of 10%. Its shares have gained 18.9% in the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>