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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cleveland-Cliffs Inc. (XNYS:CLF) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CLF
Name:
CLEVELAND-CLIFFS INC. (XNYS:CLF)
Sector:
297.00M
Industry:
Steel
CEO:
Mr. Lourenco Goncalves
Total Employees:
26,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 4.88% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CLEVELAND-CLIFFS INC.(CLF) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND STEEL INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
16.81
One Month Price Target:
$17.02
Six Month Price Target :
$18.07
Likely Price in One Year's Time:
Ticker:
$19.33
Likely Trading Range Today Under (Normal Volatility)
$16.72
Price Upper limit ($) :
$16.97
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$15.31
This week:
$13.45
This month :
$10.1
Other Primary facts
Market Cap:
8.95B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
517.30M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
19.95%
-24.27%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$23.77
$20.53
$9.85
$13.09
Medium risk (<10%) entry points
Buy Call
Sell Call
$19.48
Buy Put:
Sell Put:
$18.79
$14.13
$14.83
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CLF
Sharpe Ratio:
4.14%
Comparison:
CLF, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 9.37% higher than the industry
& ratio is 81.55% higher than the market/S&P 500 average
Average Returns/Yield of
CLF
Daily returns:
0.19%
Weekly returns:
0.96%
Monthly returns:
3.85%
Yearly returns:
34.75%
Comparison of returns:
Average annual returns/yield (last 3 years) is 33.07% above industry average
Classification:
CLF, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.75
Statistical test of Returns:
CLF has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.44%
Weekly Volatility:
9.93%
Monthly Volatility:
19.86%
Yearly Volatility:
68.81%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
2.75%
Volatility in last five trading days has been -38.08% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.93%
Weekly VaR:
-19.97%
Monthly VaR:
-39.94%
How Much Can the price of
CLF
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-33%
Worst case (decline):
>85%
This translates to price declining to:
$11.25
This translates to price declining to:
$2.52
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
CLF is a 181.86% riskier investment compared to the market/S&P 500 & is 141.47% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 11.69% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CLF
Beta in relation to market/S&P 500--2.23
Expected beta in 1 year's time:
1.233
Expected beta in 3 year's time:
1.743
Unlevered (debt free) Beta:
1.183
Beta in relation to Nasdaq (XNAS):
1.177
Beta in relation to all global stocks::
1.12
Beta Comparison & Analysis
Beta of competitors/peers::
1.214
Beta is 83.63% higher than peers
Average Industry Beta:
1.33
Beta is 67.60% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
78.82%
Sustainable growth rate is 65.03% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.278
Alpha is 23.72% above industry average alpha yield
Alpha is 1771% higher than market/& is unsustainably high
Analysis of Cost of Capital of
CLF
Equity cost of capital:
0.184
Equity cost of capital is 50.23% above industry mean WACC
Unlevered (without debt) cost of capital:
9.78%
Before-tax cost of debt:
-7.00%
After-tax cost of debt:
-5.53%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-5.53%
WACC is 27.86% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$43.21
Revenue growth rate per share of (3Y):
1.32
Annual revenue growth rate is 288.06% above the industry average
EPS:
$6.85
Expected Annual growth rate of EPS (3Y):
71.53%
Expected future EPS growth rate is 20.34% higher than the Steel industry
Free cash flow (FCF) per share:
$3.72
Balance sheet equity growth per share: -100.00%
Equity growth rate per share is 461.38% higher than the industry
Debt per share
$9.72
EBITDA per share
$7.04
Valuation Analysis Today of
CLF
P/E Ratio:
2.53
P/E Ratio of Competitors/Peers:
11.25
P/E ratio is -77.49% lower than main peers & is -41.52% lower than the industry
Stock price/value with industry average P/E ratio: $29.65
CLF is -43.30% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $17.62
Present value of the expected future dividends only: $0.65
P/S (Price to Sales ratio):
0.39
Price to sales ratio is -35.90% below the industry mean
P/B (Price to book value ratio):
1.32
Price to free cash flow: 4.52
Price to free cash flow ratio is -30.75% lower than the industry
Net income growth rate (3Y):
54.28%
Net income growth rate is -61.98% lower than the industry average net income growth rate
Dividend Analysis
-
Dividend yeild: 0.71%
Previous Dividend: $0.06
Previous adjusted dividend: $0.06
Previous Dividend: $0.12
-
-
Average dividend payment (long-term): $0.06
Average dividend increase/decrease (growth rate) % per period: 0.00%
-
-
-
Previous dividend payment date: 15/04/2020
Previous dividend record date: 04/03/2020
Previous dividend declaration date: 18/02/2020
Dividend History:
2020-04-02--$0.06
--$0.00
--$0.00
2020-01-02--$0.06
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
79.32%
Net debt to equity ratio:
78.77%
Debt to assets ratio:
25.44%
Net debt to assets ratio:
25.26%
Debt-to-asset ratio is -48.57% below industry average
Ability to repay debt:
Interest coverage ratio:
-10.35
Interest coverage ratio is -130.40% less than industry average
Looking forward:
Debt growth rate:
-2.82%
Annual debt growth is -538% lower than industry average debt growth rate
Debt repayment rate in last quarter: 28.14%
Analysis of Key Statistics
Correlation of price movement with the market:
0.555
Statistical significance of correlation:
CLF has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.523
Stock price is 6.08% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.523
Correlation of price movement with Nasdaq (^IXIC):
0.024
Covariance of price movement with the market:
0.063
Kurtosis
2.739
Returns are, approximately, normally distributed (mesokurtic)
Skewness of returns:
-0.018
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CLF
Gross Profit Margin Ratio:
98%
Operating Profit Margin Ratio:
22.05%
Operating profit margin is 50.18% higher than the industry
Net Profit Margin Ratio:
98%
Effective Tax Rate:
-11.39%
Effective tax rate is -161.92% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
59.84%
Return on equity (ROE) is 19.69% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
19.19%
Return on assets (ROA) is -0.93% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
2.28
Current ratio is -13.18% below industry average
Cash Conversion Cycle (days):
20.2
Cash conversion cycle is -47.16% below industry average
The remaining useful life of property plant & equipment is: 4.3 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
859.6K
Each employee generates -91% less revenue than industry average revenue per employee
EBITDA generated per employee:
140.2K
Each employee generates -95% less EBITDA than industry average revenue per employee
Profit generated per employee:
145.9K
Each employee generates -93% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
11.4K
Each employee generates -94% less free cash flow than industry average revenue per employee
Assets/Capital per employee
431.1K
Each employee generates -94% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CLF
ALCOA CORPORATION (XNYS:AA)
RPM INTERNATIONAL INC. (XNYS:RPM)
AGNICO EAGLE MINES LIMITED (XNYS:AEM)
RELIANCE STEEL & ALUMINUM CO. (XNYS:RS)
KIRKLAND LAKE GOLD LTD. (XNYS:KL)
WESTLAKE CORPORATION (XNYS:WLK)
ICL GROUP LTD (XNYS:ICL)
West Fraser Timber Co. Ltd. (XNYS:WFG)
CEMEX PUBLICLY TRADED STOCK CORPORATION WITH VARIABLE CAPITAL (XNYS:CX)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�21%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
22.35B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
16.86B
5.50B
-
-
449.00M
-
- 814000.00K
- 365000.00K
-
- 352000.00K
748.00M
3.64B
4.93B
3.79B
4.79B
- 545000.00K
3.79B
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
- 620000.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
339.00M
Net Cash Provided by Operating Activities:
533.00M
Investments in PP&E:
- 236000.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
35.00M
-
35.00M
2.67B
5.56B
295.00M
8.56B
9.01B
1.13B
215.00M
-
-
855.00M
11.21B
-
19.77B
2.27B
-
-
-
1.48B
3.75B
5.03B
4.38B
9.41B
-
13.16B
66.00M
800.00M
715.0M
-
March 31, 2022 at 6:00:00 AM
16.49B
6.34B
19.50B
-
5.03B
5.0B
-
1.00M
- 235000.00K
- 1969000.00K
-
- 19000.00K
-
1.68B
- 311000.00K
-
- 13000.00K
35.00M
48.00M
533.00M
- 236000.00K
297.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
CLF
2023
2024
2025
2026
2027
$19.43
$60.42
$69.47
$79.88
$91.84