Declines From Cliffs Natural Resources Inc. (CLF) Drive Down Basic Materials Sector

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Cliffs Natural Resources ( CLF) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day up 0.4%. By the end of trading, Cliffs Natural Resources fell 23 cents (-1.1%) to $21.43 on average volume. Throughout the day, 11.2 million shares of Cliffs Natural Resources exchanged hands as compared to its average daily volume of 8.9 million shares. The stock ranged in price between $21.07-$22.12 after having opened the day at $21.91 as compared to the previous trading day's close of $21.66. Other companies within the Basic Materials sector that declined today were: GMX Resources ( GMXR), down 11.9%, Gasco Energy ( GSX), down 9.5%, Syntroleum Corporation ( SYNM), down 8.8%, and Prospect Global Resources ( PGRX), down 8.7%.
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Cliffs Natural Resources Inc., a mining and natural resources company, engages in the production of iron ore pellets, fines and lump ore, and metallurgical coal. Cliffs Natural Resources has a market cap of $2.96 billion and is part of the metals & mining industry. Shares are down 43.8% year to date as of the close of trading on Monday. Currently there are two analysts that rate Cliffs Natural Resources a buy, one analyst rates it a sell, and 11 rate it a hold.

TheStreet Ratings rates Cliffs Natural Resources as a hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

On the positive front, BMB Munai ( BMBM), up 20%, New Concept Energy ( GBR), up 12%, Quicksilver Resources ( KWK), up 9.5%, and Dejour Energy ( DEJ), up 8.2%, were all gainers within the basic materials sector with Pioneer Natural Resources Company ( PXD) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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