The Cliffs (CLF) momentum was broken after they announced secondary offering to raise capital last month. Since the offering the stock has picked up nicely were it left off. As Americas #1 iron ore producer it has grossly underperformed its rivals like Rio Tinto (RTP) & pellet customers like US Steel (X).
Irrespective of recent iron ore price cuts by oversees competitors, its not demand driven & Cliffs will be able to assuage there balance sheet through the spot market. China, the worlds largest steel producer has been holding out for further cuts to 2007 levels. Continued consolidation in the iron ore space bodes well for Cliffs as takeover target by China. CLF 90 day Price target, $57 per share.
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