Michael Giordano Cliffs Natural Resources CLF-N BUY Nov 18, 2013

Mining sector has taken a pounding. China coming back is not enough to move iron ore quickly, so be patient. It might go lower before it goes higher. If you are patient, buying down here is probably a good idea.

(Market Call Minute.) Has literally fallen off the “Cliff”. Has been one of the worst performing stocks. Exposure to iron ore is a little too much. Stock will suffer in the short term but longer-term it is all right.

High cost producer needing $105 per ton in order to break even. At this time there are a lot more iron ore projects coming on and she would prefer a lower cost producer or a copper stock.

Steel is the most primary of all industries. Any country that becomes industrialized, wants a steel industry. China produces and consumes over half the world’s steel. They have so many steel plants right now that the only real product for them is iron ore. He wouldn’t invest in the still company because there is overcapacity globally. In terms of iron ore, the fundamentals are okay but not terrific. Growth is very slow in China right now down to 7.5%.

A pure iron ore play. After a few years of downturn, iron ore prices looked like they were ready to bottom out in 2014. Problem is, the stock is anticipating an increase so it has had a bit of a move up after hitting its low. Not a huge fan of iron ore and he can’t see a lot of upside for this company for the next couple of years.

There is a reason for things being cheap. It’s been a tough space. You have to look for relative value not just that things go down.

He likes the volume that it has had in 2016, and he would be a buyer. The stock looks like it has bottomed out. It looks like it has found a bottom and the volumes are back.

A commodity stock, and will be more volatile than most. It is so levered to large infrastructure steelmaking, but it is very hard to see how that is going to take off, unless you have a massive infrastructure spend. Growth outside the US is going to be pretty slow. Thinks you will see this just trade sideways for most of the year.

His general view on iron ore is a little negative. If you look at the supply/demand dynamics, it is more skewed towards an oversupply situation. Feels we are going to be in a situation where it is going to be a surplus. Iron ore has had a nice run and almost got up to $100 a ton. Doesn’t think that is sustainable, and thinks it pulls back to the $60-$70 range.