Trade-Ideas LLC identified

Cliffs Natural Resources

(

CLF

) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Cliffs Natural Resources as such a stock due to the following factors:

  • CLF has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $13.9 million.
  • CLF has traded 1.0 million shares today.
  • CLF is up 3.4% today.
  • CLF was down 6.7% yesterday.

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More details on CLF:

Cliffs Natural Resources Inc., a mining and natural resources company, produces iron ore and metallurgical coal. The stock currently has a dividend yield of 10.2%. Currently there are 2 analysts that rate Cliffs Natural Resources a buy, 4 analysts rate it a sell, and 8 rate it a hold.

The average volume for Cliffs Natural Resources has been 6.5 million shares per day over the past 30 days. Cliffs Natural has a market cap of $434.1 million and is part of the basic materials sector and metals & mining industry. The stock has a beta of -0.01 and a short float of 40.8% with 11.62 days to cover. Shares are down 63% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Cliffs Natural Resources as a

sell

. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for CLIFFS NATURAL RESOURCES INC is rather low; currently it is at 17.76%. It has decreased significantly from the same period last year.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 73.05%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 157.14% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • CLIFFS NATURAL RESOURCES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CLIFFS NATURAL RESOURCES INC swung to a loss, reporting -$46.11 versus $2.33 in the prior year. This year, the market expects an improvement in earnings (-$0.41 versus -$46.11).
  • Despite the weak revenue results, CLF has outperformed against the industry average of 45.1%. Since the same quarter one year prior, revenues fell by 33.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 452.3% when compared to the same quarter one year prior, rising from $10.90 million to $60.20 million.

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