Trade-Ideas LLC identified

Cliffs Natural Resources

(

CLF

) as a "perilous reversal" (up big yesterday but down 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 $75.9 million.
  • CLF has traded 9.4 million shares today.
  • CLF is down 3.2% today.
  • CLF was up 12.8% yesterday.

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More details on CLF:

Cliffs Natural Resources Inc., a mining and natural resources company, produces and supplies iron ore. The company operates five iron ore mines in Michigan and Minnesota; and Koolyanobbing iron ore mining complex located in Western Australia, which produces lump and fines iron ore. CLF has a PE ratio of 32. Currently there are 2 analysts that rate Cliffs Natural Resources a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Cliffs Natural Resources has been 12.8 million shares per day over the past 30 days. Cliffs Natural has a market cap of $1.3 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 1.16 and a short float of 35.1% with 5.42 days to cover. Shares are up 407.6% year-to-date as of the close of trading on Tuesday.

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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 feeble growth in its earnings per share and poor profit margins.

Highlights from the ratings report include:

  • CLIFFS NATURAL RESOURCES INC's earnings per share declined by 37.1% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CLIFFS NATURAL RESOURCES INC reported lower earnings of $0.64 versus $1.65 in the prior year. For the next year, the market is expecting a contraction of 12.5% in earnings ($0.56 versus $0.64).
  • The gross profit margin for CLIFFS NATURAL RESOURCES INC is rather low; currently it is at 21.64%. It has decreased from the same quarter the previous year.
  • Despite the weak revenue results, CLF has outperformed against the industry average of 45.9%. Since the same quarter one year prior, revenues fell by 31.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Compared to its closing price of one year ago, CLF's share price has jumped by 142.46%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in CLF do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • 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 114.2% when compared to the same quarter one year prior, rising from -$759.80 million to $108.00 million.

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