Cleveland-Cliffs strengthens its market position
In 2021, a law that regulates investment in infrastructure and jobs came into effect. This was an excellent opportunity for several companies to strengthen their position and increase revenues. Cleveland-Cliffs Steel Company, which has seen strong growth recently, was one of them. Its Relative Strength (RS) rating rose by 11 points to 76. This indicator shows that the producer’s shares are in first place. Moreover, it is only 4 points away from the leading benchmark.
According to the market analysis, the best growth is recorded by stocks with an RS rating above 80. After passing this point, the price starts to move actively. So far, experts are not in a hurry to predict the further growth of Cleveland-Cliffs’ share price. However, current trends suggest a good pace of recovery.
Cleveland-Cliffs’ share price started to rise after the release of its earnings report. The company’s results exceeded analysts’ expectations. This immediately impacted the share price, which was up 5.1%. The following day, the momentum slowed by 1.4% in a falling market.
Factors pointing to a strong business position
In addition to the RS, other features testify to the stability of the business:
1. The composite rating is at a high level, 91 out of 99.
2. The earnings per share rating fell in 2023 after revenue fell. However, it showed an increase and reached 84 in the Q4.
3. The company’s shares have an accumulation/distribution rating of A. This suggests that the key buyers of the securities are institutional investors.
Since March 2023, the movement of securities has formed the base “cup with a handle”. The buying point was at the level of 21.4. This position lasted until January when it fell to 20.05. Experts are not sure whether the current trend can exceed the breakout price.
One of the reasons for the fall in the share price in the last quarter of 2023 was seasonality. At that time, the value of the shares fell by 5 cents. Earnings per share rose by 83% to end the period at 53 cents. The rise in the share price was due to an increase in sales volumes, which had been declining for several quarters.
It is worth noting that the producer’s stock is the market leader among its peers. Nucor is in second place, followed by Steel Dynamics.
Cleveland-Cliffs operates in the steel sector. It is the largest supplier of flat-rolled steel products in North America. It is also active in the mining and processing of iron ore.
The company owns mines and integrated steelmaking facilities in several US states. Its mining operations are in Minnesota and Michigan.
