/biz/ - Business & Finance

>$CLF. My DD:
Here's the skinny: Cliff Natural Resources specializes in mining iron ore pellets for steel production. (Been in business since the 1800’s)
>Catalyst: May 31, Secured new long term contract with the world’s largest steel producer (ArcelorMittal) It is a 10-year contract (til 2026). The new contract establishes a minimum tonnage of pellets that ArcelorMittal must buy (7 million tons, notably higher than previous contracts) and allows for AM to purchase up to 10 million tons. $CLF will be AM’s sole outside pellet supplier.
Other Notables: See company website. Renting idle infrastructure to other company for $31 mil, and separately was awarded top honors at a Platts Global Metal Awards.
The next ‘resistance’ is NOT going to be a factor, at ~$5.72 (pivot point from, May 2). Over the weekend prior to May 2, 1Q2016 results were released and earnings ($36million) were down 30% from 1Q2015. So the stock dropped on a catalyst, bad 1Q results. After the May 2 drop, the good news I mentioned above arrived and the gains returned. The stock has been on a steady climb back up to $5/share with no signs of slowing.
“B-but anon, steel prices are down, aren’t they? Too much supply in China right now, r-right?”
Here’s the secret, iron-ore pellet prices are up (which is what CLF is mining), back to 2008 levels and rising. ( don’t be fooled by May 2008 share price, there was a billion dollar merger that CLF decided to back out of). Steel prices are expected to rise into April. Here’s a quick timeline of last week (catalyst gains). $1.20 the day news came out, .$.10 over next two days (resistance point), $.33 cents yesterday and $.40 cents today at 6/2. I encourage you to analyze the candlesticks. Next resistance? In my mind as we approach $7, and then again ~$8.60. But don’t hold me to it. I've got more reading to do.
http://www.indexmundi.com/commodities/?commodity=iron-ore&months=240
Good luck dudes, whether you climb aboard or not.