I today bought shares of Cliffs Natural Resources (CLF) at $87.30. Following is the research I did last night:
Here is an interesting situation, although I'm not a Financial Advisor yet, so what you do is your business. There is this company, Cliffs Natural Resources (CLF). It's a mining company but carries a double digit Net Profit Margin, so it has monopolistic dynamics working for it. It's in Value Line's main presentation, so it's big enough to have tested management. It has a Current Ratio of 3.35 (lots of cash in the bank); even a Current Ratio of 2 is acceptable. It lists a Net Profit for 2011 of $1.78 billion against Long term Debt of $2.7 billion, meaning debt can be paid off within a year or two with earnings alone. The p/e ratio is listed at 6.6, with an expanding Net Profit Margin from 23.6 in 2011 to 23.8 in 2012 and had a Net Profit Margin of 19.4 in 2010. Stocks should range between $130 to $260 a share over the next year, assuming no downward changes in the Net Profit Margin. Current price: $86 +/-.
