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Why Cliffs Natural Is Too Cheap to Pass Up

Friday - 3/22/2013, 9:41am  ET

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, iron-ore miner Cliffs Natural Resources has earned a respected four-star ranking.

With that in mind, let's take a closer look at Cliffs and see what CAPS investors are saying about the stock right now.

Cliffs facts

Headquarters (founded)

Cleveland (1847)

Market Cap

$3.0 billion

Industry

Steel

Trailing-12-Month Revenue

$5.9 billion

Management

Chairman/CEO Joseph Carrabba

CFO Terrance Paradie

Return on Equity (average, past 3 years)

15.4%

Cash/Debt

$195.2 million / $4.3 billion

Dividend Yield

2.7%

Competitors

Alpha Natural Resources

CONSOL Energy

Peabody Energy

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 1,589 members who have rated Cliffs believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, bostonjohn, tapped Cliffs as a particularly enticing turnaround opportunity:

The 52-week range as well as the historical range should provide at least 100% upside.

It has been taking a beating from missing projected revenue targets the past few quarters, but it produces the iron to make steel in emerging market powerhouses like Asia.

The technicals may not look sound now, but give it a couple years and you'll see the profits from increased infrastructure in the emerging markets. I'd rather invest when there's blood in the water than when everything looks great.

If you want market-beating returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Cliffs may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

This article was originally published as Why Cliffs Natural Is Too Cheap to Pass Upon Fool.com

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