Early Morning Activity Shows Cliffs Natural Resources (CLF) Down

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Cliffs Natural Resources ( CLF) as a pre-market laggard 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 $183.2 million.
  • CLF traded 23,705 shares today in the pre-market hours as of 9:20 AM.
  • CLF is down 2.1% today from yesterday's close.

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More details on CLF:

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. The stock currently has a dividend yield of 2.7%. Currently there are 3 analysts that rate Cliffs Natural Resources a buy, 2 analysts rate it a sell, and 10 rate it a hold.

The average volume for Cliffs Natural Resources has been 7.7 million shares per day over the past 30 days. Cliffs Natural has a market cap of $3.4 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 2.49 and a short float of 33.4% with 5.35 days to cover. Shares are down 18.7% 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 hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:
  • 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 37.7% when compared to the same quarter one year prior, rising from $85.10 million to $117.20 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CLIFFS NATURAL RESOURCES INC has improved earnings per share by 6.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CLIFFS NATURAL RESOURCES INC swung to a loss, reporting -$6.59 versus $11.34 in the prior year. This year, the market expects an improvement in earnings ($3.00 versus -$6.59).
  • CLF's debt-to-equity ratio of 0.62 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that CLF's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.56 is low and demonstrates weak liquidity.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, CLIFFS NATURAL RESOURCES INC's return on equity significantly trails that of both the industry average and the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
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