Cleveland Cliffs - A Man Among Boys
Let me be the first to say I lightened up on this stock far too early - and we never had enough exposure (at most 1.5% of the fund). We have nearly a double in this position since adding it in the hectic March sell off. What a performance; and a little known fact is they have serious metallurgical coal exposure on TOP of their iron ore exposure (
Chinese Warned of Record Rise in Ore Price - 85-95%!) (
Apr 7: Posco Agrees to 200% Coal Price Increase)
It is funny to
read through this article because I was in this name back in the days when they bought Portman and I remember the very negative reaction by VERY SHORT SIGHTED investors - who many times much prefer companies do not spend on R&D or don't spend on smart acquisitions - since all they care about are moves to boost EPS one quarter out. But never in my imagination back then did I foresee this type of move. The move into met coal? Prescient. Personally I've been blown away that one of the mining world's "Big 3" have not taken
Cleveland Cliffs (CLF) out a long time ago.
- Cleveland-Cliffs Inc. has seen its stock price rise more than 300 percent since the beginning of 2007. But that's nothing.
- If you go back to January 2001 -- the height of the steel crisis -- Cliffs' stock price has gone up some 5,000 percent, from about $2 a share to more than $100 today.
- That means a $20,000 investment then is worth $1 million now. (@&*(@!&*!)
- Global growth, especially in China, and a weak U.S. dollar have been the drivers, pushing up demand for steel made here and abroad. Cliffs mines in Michigan, Minnesota and Canada supply blast furnaces across North America with iron ore, the main ingredient in making steel, while their mines in Australia ship to China and Japan.
- Cliffs recent foray into metallurgical coal is expected to pay off in a big way, too.
- It has made all the right moves, beginning with a decision to expand its iron ore reserves in North America at a time when bankrupt steel companies were looking to unload them. Adding reserves at bargain prices proved brilliant, as Cleveland-Cliffs had more iron ore to sell once the steel industry consolidated and surged back to life.
- The company's then chief executive John Brinzo didn't stop there.
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