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On the SPOT blog (06/16/2022) [C..]

Updated: Aug 31, 2022

Market volatility continued today as not much has changed to calm the fear among investors about the plethora of issues with the most recent one being the fear of recession. US markets seem to have fallen off the cliff for a while now and have trouble finding a bottom. Speaking of cliffs, let's discuss Cleveland Cliffs (ticker CLF) to checkout it out and see if it makes sense to add it our closely watched list after it appeared in the discounted zone recently. This steel producer owns five (5) iron ore mines in Minnesota and Michigan, and produces carbon steel products, stainless steel products, plates and electrical steel products. Its customers span across a variety of industries (automotive, infrastructure, manufacturing, steel producers etc).This company has been in flux in recent times with merger and acquisition activities. CLF acquired ArcelorMittal USA and is merging with AK Steel. These are expected to boost operational synergies and make it one of the larger steel companies in the US. CLF is thus shaping up to become a vertically integrated steel company. Its iron ore business is doing well. High steel prices should also help CLF. Its relatively new HBI (hot briquettes iron) plant seems to have good prospects as its demand is expected to increase. In its last reported quarter, CLF beat on both earning and revenue estimates. Management also raised the guidance for its average selling price for 2022 and expects to grow its free cash flow. PE and PEG seem pretty low. These are some of the reasons why we have this stock in our watchlist.

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