Delays to Cliffs Natural (CLF) Meeting Unacceptable, Says Casablanca

NEW YORK (TheStreet) -- Casablanca Capital is urging Cliffs Natural Resources (CLF) to hold its annual shareholder meeting by June 4, noting the delays are "unacceptable."

The firm which holds an approximate 5.2% stake in Cliffs sent a letter to the company's board, pushing for the miner to provide a "meaningful voice to shareholders."

"We believe the pitifully small steps that the Board has taken to date have only been in response to Casablanca's efforts," said Casablanca chairman Donald Drapkin regarding turnaround attempts. "This Board must be held accountable."

Should the company fail to schedule the annual meeting on or before the date, Casablanca said it will commence a consent solicitation to call a special meeting of shareholders for the election of the company's board. 

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TheStreet Ratings team rates CLIFFS NATURAL RESOURCES INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CLIFFS NATURAL RESOURCES INC (CLF) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including poor profit margins and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 92.46% to $460.00 million when compared to the same quarter last year. In addition, CLIFFS NATURAL RESOURCES INC has also vastly surpassed the industry average cash flow growth rate of -39.42%.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, CLIFFS NATURAL RESOURCES INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.54, it is higher than that of the industry average, inferring that management of debt levels may need to 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.
  • The gross profit margin for CLIFFS NATURAL RESOURCES INC is rather low; currently it is at 18.47%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.85% significantly trails the industry average.
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