With Vultures Circling, Cliffs Natural Resources Breaks Important Support

The vultures continue to circle around Cliffs Natural Resources Inc (CLF) looking to take advantage of a company desperate to raise enough cash to stay alive. From Bloomberg today (Sept 26, 2014):

“Cliffs Natural Resources Inc. (CLF), the U.S. iron-ore producer, has drawn interest for its Australian mines from producers including Mineral Resources Ltd. (MIN) and Mount Gibson Iron Ltd. (MGX), people with knowledge of the matter said.

The Australian companies are weighing bids for the iron-ore mines in Western Australia state that may be valued at as much as A$1 billion ($876 million), said the people, asking not to be identified as the details are private. No formal offers have been made yet and there is no certainty the U.S. company will agree to sell the assets, the people said.”

These rumors unfortunately were not enough to stave of a major break of support: the 2009 intraday lows.

Cliff Natural Resources (CLF) hits a ~10-year low
Cliff Natural Resources (CLF) hits a ~10-year low

Source: FreeStockCharts.com

This is the chart of a company that completely blew its opportunity to benefit from the commodities supercycle. At the current pace, I see every reason to expect that at some point in the next few years, CLF, a mere shadow of its former self, will return to its former state of non-glory in the early 2000s. I think it is quite telling that CLF bought its Australian assets in 2008 just as its stock was going parabolic into an all-time high and peak and just ahead of the financial crisis.

Be careful out there!

Full disclosure: no positions

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