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Play #1 - Profit on Cliffs

27 May 2010                         Kovacs Attila Mate

Cliffs Natural Resources Inc. (NYSE: CLF)

Price: $ 57    Market Cap: $8 billion

The former Cleveland-Cliffs, founded in 1847, produces iron ore pellets from six mines in the Mesabi range and supplies coal from two coking coal mines in West Virginia and Alabama.
It also owns  30% of Portman Limited, an Australian iron ore producer, and 45% of the Sonoma Project, an Australian coking and thermal coal project. CLF thus has exposure to explosive Chinese growth through its Australian operations. The P/E ratio of 24 looks high, but falls below 20 based on the latest quarter, as CLF’s profits are soaring.
The company even pays a dividend – 35 cents a share annually.

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