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5 Reasons That Make Cleveland-Cliffs (CLF) a Solid Pick 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 investors to buy the stock as it holds promise and is likely to sustain the momentum.
Let’s look into the factors that make this mining stock an attractive choice.
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 an appropriate investment proposition at the moment.
Estimates Moving Higher: Annual estimates for Cleveland-Cliffs have moved north over the past month, reflecting analysts’ confidence on the stock. The Zacks Consensus Estimate for 2018 rose 2.4% to $1.74 in the past 30 days. The consensus estimate for 2019 has also moved up 4.9% over the same timeframe to $1.51.
Upbeat Outlook: In July, Cleveland-Cliffs raised expectation for the U.S. Iron Ore volume to 21 million long tons from 20.5 million long tons on the back of strong demand. Moreover, the company expects to sell 6-6.5 million long tons in the third quarter, higher than 5.97 million long tons recorded in the second quarter. However, production volume expectation is unchanged at 20 million tons.
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 11.2 compared with the industry average of 21.4.
An Outperformer: Cleveland-Cliffs has significantly outperformed the industry it belongs to in the past three months. The company’s shares have rallied 44.8% against the industry’s decline of around 1.6%.
Ingevity has an expected long-term earnings growth rate of 12%. Its shares have rallied 74.6% in the past year.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have gained 37.6% in the past year.
Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have moved up 7% in a 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 That Make Cleveland-Cliffs (CLF) a Solid Pick Now
We are optimistic about Cleveland-Cliffs Inc.’s (CLF - Free Report) prospects and believe that the time is right for investors to buy the stock as it holds promise and is likely to sustain the momentum.
Let’s look into the factors that make this mining stock an attractive choice.
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 an appropriate investment proposition at the moment.
Estimates Moving Higher: Annual estimates for Cleveland-Cliffs have moved north over the past month, reflecting analysts’ confidence on the stock. The Zacks Consensus Estimate for 2018 rose 2.4% to $1.74 in the past 30 days. The consensus estimate for 2019 has also moved up 4.9% over the same timeframe to $1.51.
Cleveland-Cliffs Inc. Price and Consensus
Cleveland-Cliffs Inc. Price and Consensus | Cleveland-Cliffs Inc. Quote
Upbeat Outlook: In July, Cleveland-Cliffs raised expectation for the U.S. Iron Ore volume to 21 million long tons from 20.5 million long tons on the back of strong demand. Moreover, the company expects to sell 6-6.5 million long tons in the third quarter, higher than 5.97 million long tons recorded in the second quarter. However, production volume expectation is unchanged at 20 million tons.
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 11.2 compared with the industry average of 21.4.
An Outperformer: Cleveland-Cliffs has significantly outperformed the industry it belongs to in the past three months. The company’s shares have rallied 44.8% against the industry’s decline of around 1.6%.
Other Stocks to Consider
A few other top-ranked stocks in the basic materials space are Ingevity Corporation (NGVT - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) and Huntsman Corporation (HUN - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ingevity has an expected long-term earnings growth rate of 12%. Its shares have rallied 74.6% in the past year.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have gained 37.6% in the past year.
Huntsman has an expected long-term earnings growth rate of 8.5%. Its shares have moved up 7% in a 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 >>