Is Cliffs Natural Resources a Bargain?
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?