TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, says iron ore sales have refused to decline and are essentially saving Cliffs Natural right now. He added that some investors think the Chinese have been buying a lot of iron ore.
Cliffs Natural is doing a lot of things to protect itself, Cramer said. He stressed that investors should not confuse protection with entrenchment. The company can also cut a lot of costs going forward.
Turning to American International Group (AIG - Get Report), Cramer was surprised the stock is trading lower after beating earnings per share estimates. AIG boosted its dividend by 25%, raised its buyback by $1 billion and trades at a 20% discount to its book value, which he estimates to be around $60 per share.However, he said the company faces a "challenging and competitive" business environment. Anytime management says "challenging" it translates to "sell" when it comes to the stock, Cramer pointed out. He thinks the current selling is premature, however, because AIG continues to do very well. Shares are lower by about 2%.
- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts