Cliffs Natural Resources Inc. (CLF) is the largest producer of iron ore pellets in the U.S. Cliffs increasing its international iron ore exposure, recovery in its coal business and longer-term diversification into the chromium business are huge positives for the stock.
The company focuses on growing its international exposure in the face of a consistent decline in North American production. The Wabush acquisition is consistent with this approach, as production from this mine will be sold primarily in Europe. The company has recently raised its iron ore and coal sales and production volumes with steel demand recovering in the last couple of months.
Separately, Cliffs has also enhanced its financial flexibility by raising about $347 million through equity followed by compensation reductions, which should result in annual savings of $37 million.Zacks Investment Research