Cleveland Story

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CLF -- USA Stock  

USD 12.55  0.56  4.67%

While some baby boomers are getting worried about basic materials space, it is reasonable to digest Cleveland Cliffs. We will evaluate why we are still confident in anticipation of a recovery. Is Cleveland Cliffs valuation justified? I am going to cover the entity perspective on valuation to give you a better outlook on taking a position in it.
Published over a month ago
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Is Cleveland Cliffs (NYSE:CLF) ready for a correction?
The company has 4.64 B in debt with debt to equity (D/E) ratio of 4.15, demonstrating that the firm may be unable to create cash to meet all of its financial commitments. Cleveland Cliffs has a current ratio of 2.5, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. We provide trade advice to complement the prevailing expert consensus on Cleveland Cliffs. Our dynamic recommendation engine uses a multidimensional algorithm to analyze the company's potential to grow using all technical and fundamental data available at the time.
We determine the current worth of Cleveland Cliffs using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Cleveland Cliffs based exclusively on its fundamental and basic technical indicators. By analyzing Cleveland Cliffs's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Cleveland Cliffs's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Cleveland Cliffs. We calculate exposure to Cleveland Cliffs's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Cleveland Cliffs's related companies.

Cleveland Cliffs Investment Alerts

Cleveland investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Cleveland Cliffs performance across your portfolios.Please check all investment alerts for Cleveland

Cleveland Cliffs Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Cleveland value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Cleveland Cliffs competition to find correlations between indicators driving the intrinsic value of Cleveland.

How Cleveland utilizes its cash?

To perform a cash flow analysis of Cleveland Cliffs, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Cleveland Cliffs is receiving and how much cash it distributes out in a given period. The Cleveland Cliffs cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities. Cleveland Cliffs Net Cash Flow from Operations is projected to decrease significantly based on the last few years of reporting. The past year's Net Cash Flow from Operations was at 562.5 Million

What is driving Cleveland Cliffs Investor Appetite?

The entity reported the last year's revenue of 2.54 B. Reported Net Loss for the year was (21.1 M) with profit before taxes, overhead, and interest of 575.7 M.

Margins Breakdown

Cleveland profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Cleveland Cliffs itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Cleveland Cliffs profit margins.
Operating Margin18.63
EBITDA Margin0.27
Gross Margin0.3
Profit Margin0.16


Cleveland Cliffs Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. Cleveland Cliffs Earnings Before Interest Taxes and Depreciation Amortization EBITDA is decreasing over the last 8 years. The previous year's value of Cleveland Cliffs Earnings Before Interest Taxes and Depreciation Amortization EBITDA was 535,913,158. Additionally, Cleveland Cliffs Net Income Per Employee is rather stable at the moment. Cleveland Cliffs Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. The latest value of Cleveland Cliffs Earnings Before Interest Taxes and Depreciation Amortization USD is 535,913,158. Cleveland Cliffs Earnings Before Interest Taxes and Depreciation Amortization EBITDA is rather stable at the moment. Additionally, Cleveland Cliffs Net Income Per Employee is rather stable at the moment.

Will Cleveland Cliffs latest surge continue?

Cleveland Cliffs latest potential upside ascents over 5.83. Cleveland Cliffs shows above-average downside volatility for the selected time horizon. We advise investors to inspect Cleveland Cliffs further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Cleveland Cliffs future alpha.

Our Conclusion on Cleveland Cliffs

Although some other firms within the steel industry are still a little expensive, even after the recent corrections, Cleveland Cliffs may offer a potential longer-term growth to shareholders. All things considered, as of the 23rd of October 2020, our analysis shows that Cleveland Cliffs almost mirrors the market. The firm is overvalued and projects below average probability of distress for the next 2 years. However, our present 30 days buy-hold-sell recommendation on the firm is Buy.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Cleveland Cliffs. Please refer to our Terms of Use for any information regarding our disclosure principles.

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