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Cliffs Natural Resources ( CLF) is the largest producer of iron ore in North America, operating mines that supply nearly 50% of North American blast furnace demand.

It is trading at about $68 per share and has a market value of $10 billion. It has a projected 1.57% dividend yield.

With a forward P/E of 5.3, Auer said "it is probably the cheapest stock in our portfolio."

And he raves about its earnings prospects, noting that it earned $4.07 per share in its most recent quarter and analysts estimate it will earn $12.80 per share next year, up from $7.49 per share this year.

Goldman Sachs (GS) added Cliffs to its "convictions buy" list of most favored stocks this week.

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