Cliffs Natural Resources Inc. (CLF) shares continue to set new highs as analysts and management raise estimates.
Company Description
Cliffs Natural Resources mines iron and metallurgical coal in the U.S., South America, and Australia. The company focuses on supplying growing markets.
Improving Outlook
When Cliffs reported third-quarter results on Oct 29 it included comments on improving business conditions and a positive outlook. Revenues fell 44% year-over-year to $666 million, but demand has been increasing sequentially.
Net income was $81 million, which equates to 45 cents per share. Analysts polled by Zacks were expecting a loss of 6 cents. This was the third surprise in the past 4 quarters.
Estimates Pop
Following the earnings news, the Zacks Consensus Estimate for full-year 2009 jumped to 67 cents, from a 28 cent loss. Forecasts for 2010 now average $2.89, up from $2.31. This brings the growth rate to 329%.
Good Value
Projected earnings are well off of last year’s levels, but the shares are a solid value. Shares of CLF are exchanging hands at 16 times forward earnings and with a PEG ratio of 0.9 times.
Recent News
Cliff is actively acquiring mines and interest in other resource companies. Additionally, shares of CLF were added to the S&P 500 index on Dec 14.
The Chart
CLF continues to set new 52-week highs on the recent upswing. Take a look at the chart below.
Zacks Growth Trader serviceZacks Investment Research
