Cliffs Natural Resources Digs Up a Rally

Jacob Harper |

cliff's natural resources stock, iron ore, iron ore prices, small-cap stocksShares of Cliffs Natural Resources (CLF) saw double-digit gains for the second consecutive day, likely as a result of rising iron ore prices. The day’s stock gains stand in stark contrast for Cliffs, which most often makes the financial news rounds as the perennial pariah of the S&P 500.

Well, was the perennial pariah. Cliffs was unceremoniously booted from the landmark index in march of 2014 following their disastrous 2013 in which the materials company was the third-worst performer in the S&P in 2013. Their 2014 has been even worse, with shares of the company falling 68.06 percent on the year.

To add insult to injury JP Morgan Chase and Co. (JPM) downgraded Cliffs from neutral to overweight. At the same time JP Morgan lowered their price target to $5 a share. And still the company carries a short float of 41.27 percent, indicating many an investor still believes there’s worse times ahead.

What had caused Cliffs to fall so dramatically, and is the uptick sustainable? A lot Cliffs' performance depends on how persistent the current US administration’s so-called “war on coal” will be. As President Obama has called for a weaning-off of coal so has Cliffs bottom line suffered, as domestic demand has slipped considerably and in turn so have Cliffs’ profits.

But coal does not make up the entirety of Cliffs’ revenue stream. While iron ore has dropped from around $150 per ton at the beginning of 2014 to its current spot price of $82.38 a ton, the metal saw a price surge of 4 percent on the day. At the same time metal analysts called for a bottom to the year’s price drop, with Citi (C) calling for a slight pick-up in the price in 2014, possibly as high as $87.

The price rise that started on October 13 was likely triggered by a report from China's National Bureau of Statisticsthat said imports rose 7 percent, in contrast to an expected fall.

Regardless of the reason, Cliffs is currently reaping the benefits of rising ore demand. By 3:30 EST shares of Cliffs had pared back slightly, but still gained 9.82 percent on the day to hit $9.02 a share.   

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
C Citigroup Inc. 73.53 0.65 0.89 15,634,587 Trade
JPM JP Morgan Chase 99.51 1.40 1.43 15,326,608 Trade
CLF Cliffs Natural Resources Inc 7.02 -0.42 -5.65 28,557,554 Trade


Emerging Growth

Valuesetters Inc

Valuesetters Inc is a next generation technology company. The Company is focused in providing technologies and infrastructure-as-a-service (Iaas) to consumer through enterprise communications, entertainment, and game platforms.

Private Markets

iPRO Network, LLC

We provide the platform, tools, and resources to empower individuals and professionals to market desirable goods and services to the public, taking the place of traditional methods of commerce.

Quants Inc

Quants, Inc, a California Corporation, develops, markets and operates financial technology platforms and alternative investment products offering sophisticated risk management since 2010. The Company has primarily sharpened its focus with…