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buffalonate (94.74)

Is Cliffs Natural Resources a Bargain?

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May 25, 2011 – Comments (3) | RELATED TICKERS: CLF

I have been searching lately for sectors that are still deeply depressed because I like value plays.  I usually don't touch large cap stocks but sometimes the value is too hard to ignore.  I was looking into Nucor because I heard that steel production was down significantly from what it was a few years so I thought it would probably be a bargain longterm.  While doing so I stumbled into Cliffs Natural Resources.  It has a p/e of 8.7 and the analysts all have it listed as a buy.  The analysts have longterm earnings growth for this company going forward at 27%.  I thought this had to be a mistake so I checked a different site and got the same number.  I think it is logical to have longterm growth like that because they will be supplying iron ore pellets to an improving U.S. economy and the emerging economies will continue to modernize.  It appears to be ridiculously cheap with a longterm growth rate of 27% and a p/e of 8.7.  Am I missing something? 

3 Comments – Post Your Own

#1) On May 25, 2011 at 8:47 PM, nshamapant (< 20) wrote:

http://www.fool.com/investing/general/2011/05/25/10-insanely-cheap-value-stocks.aspx?source=itxsitmot0000001&lidx=2

 

Idk if you read this article, but seems that you and Fool seem to agree :D 

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#2) On May 26, 2011 at 12:50 AM, buffalonate (94.74) wrote:

I did see the article the but it doesn't really say much other than that it has performed well in the past and has a good ROE.  I just found the company a few days ago and I haven't done much research on the company yet.  I saw the PEG for the company was .25 and I thought that was abnormally low so there had to be some fatal flaw in the company.  It seems too good to be true. 

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#3) On May 26, 2011 at 1:17 PM, L0RDZ (84.28) wrote:

Last time I bought something I thought was too good to be true... in a stock....  it didn't turn out so good...

Price is often truth in stock prices....

 but sometimes  they get it wrong,  I really don't know  CLF...

I think there are better  stocks in the same industry  outside of  USA...

 

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