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Cleveland-Cliffs (CLF) Hits 52-Week High: What's Driving It?

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Shares of Cleveland-Cliffs Inc. (CLF - Free Report) scaled a fresh 52-week high of $15.02 on Jan 4, before closing the session at $14.42.

The company, carrying a Zacks Rank #2 (Buy), has a market cap of around $5.8 billion. Average volume of shares traded in the past three months was around 11,007K.  

The stock has rallied 85.1% in the past year against the industry’s 24.6% rise.

What’s Driving CLF?

Cleveland-Cliffs’ complementary acquisitions reflect bright prospects. In December 2019, Cleveland-Cliffs announced that it has entered into a definitive merger agreement with AK Steel. The transaction was successfully completed in March 2020.

The merger enables the company to offer high-value iron ore and steel solutions, mainly across North America. It facilitates Cleveland-Cliffs to become a vertically-integrated steel company.  The merger is projected to generate around $151 million of annual cost synergies.

Cleveland-Cliffs also acquired all the operations of ArcelorMittal USA LLC and its subsidiaries. Post deal closure, the company becomes the largest flat-rolled steel producer in North America. Further, this synergistic transaction is expected to generate around $150 million of estimated annual cost savings.

Cleveland-Cliffs purchased ArcelorMittal USA’s six steelmaking facilities, eight finishing facilities, three coal and coke-making operations along with two iron ore mining and pelletizing operations.

In third-quarter 2020 earnings call, Cleveland-Cliffs also stated that it expects sequential improvement in its adjusted EBITDA performance in the fourth quarter based on the current pricing and normalization of operating rates. The view also takes into consideration higher shipments from the Mining & Pelletizing and the Steel & Manufacturing segments as well as an expected lowering of idle costs.


Other Stocks to Consider

Some other top-ranked stocks in the basic materials space include Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 53.6% for the current fiscal. The company’s shares have surged 152.8% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 43.3% for the current fiscal. The company’s shares have gained around 23.6% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have surged around 43% in the past year. It currently sports a Zacks Rank #1.

5 Stocks Set to Double

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