Cleveland-Cliffs Inc. (CLF) Clearly Signals Buy-Into the Stock: Don’t ignore the signals

Cleveland-Cliffs Inc. (NYSE: CLF) stock fell -2.04% on Tuesday to $20.19 against a previous-day closing price of $20.61. With 9.59 million shares changed hands, the volume of the stock remained lighter than its average volume of 13.47 million shares. During the session, the Steel company that operates in wider Basic Materials sector, reached to the highest price of $20.60 whereas the lowest price it dropped to was $19.87. The 52-week range on CLF shows that it touched its highest point at $34.04 and its lowest point at $11.82 during that stretch. It currently has a 1-year price target of $19.00. Beta for the stock currently stands at 2.19.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CLF was down-trending over the past week, with a drop of -3.49%, but this was up by 33.44% over a month. Three-month performance surged to 23.56% while six-month performance rose 21.92%. The stock gained 18.90% in the past year, while it has gained 25.33% so far this year. A look at the trailing 12-month EPS for CLF yields 4.61 with Next year EPS estimates of 1.70. For the next quarter, that number is -0.25. This implies an EPS growth rate of -46.50% for this year and -40.54% for next year.

Float and Shares Shorts:

At present, 516.00 million CLF shares are outstanding with a float of 508.28 million shares on hand for trading. On Oct 13, 2022, short shares totaled 45.24 million, which was 8.74% higher than short shares on Sep 14, 2022. In addition to Mr. C. Lourenco Goncalves as the firm’s Chairman, Pres & CEO, Mr. Celso L. Goncalves Jr. serves as its Exec. VP & CFO.


Institutional Ownership:

Through their ownership of 63.60% of CLF’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 9.43% of CLF, in contrast to 36.98% held by mutual funds. Shares owned by individuals account for 30.26%. As the largest shareholder in CLF with 9.14% of the stake, BlackRock Fund Advisors holds 47,075,369 shares worth 47,075,369. A second-largest stockholder of CLF, The Vanguard Group, Inc., holds 45,123,428 shares, controlling over 8.76% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in CLF, holding 22,553,962 shares or 4.38% stake. With a 3.09% stake in CLF, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 15,898,066 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 3.04% of CLF stock, is the second-largest Mutual Fund holder. It holds 15,667,173 shares valued at 252.4 million. Vanguard Small Cap Index Fund holds 2.58% of the stake in CLF, owning 13,278,097 shares worth 213.91 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CLF since 13 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With CLF analysts setting a high price target of $27.00 and a low target of $13.00, the average target price over the next 12 months is $19.56. Based on these targets, CLF could surge 33.73% to reach the target high and fall by -35.61% to reach the target low. Reaching the average price target will result in a decline of -3.12% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. CLF will report FY 2022 earnings on 02/09/2024. Analysts have provided yearly estimates in a range of $3.73 being high and $2.49 being low. For CLF, this leads to a yearly average estimate of $2.94. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Cleveland-Cliffs Inc. surprised analysts by -$0.20 when it reported $0.29 EPS against a consensus estimate of $0.49. The surprise factor in the prior quarter was -$0.05. Based on analyst estimates, the high estimate for the next quarter is $0.24 and the low estimate is -$0.44. The average estimate for the next quarter is thus -$0.21.

Summary of Insider Activity:

Insiders traded CLF stock several times over the past three months with 10 Buys and 8 Sells. In these transactions, 1,016,498 shares were bought while 706,458 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 14 over the past year. The total number of shares bought during that period was 1,522,947 while 757,956 shares were sold.

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