Insider Activity: Cleveland-Cliffs (CLF)

Multiple insider buys over past few weeks.

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  • Multiple insiders have been buying shares of Cleveland-Cliffs (CLF) in the past few weeks. Directors John Baldwin, Eric Rychel, Ann Harlan and Robert Fisher have been buyers, as well as CFO Keith Koci.

    Overall, since the start of August, insiders have picked up over 60,000 shares, paying close to $8 per share on average, with the total coming out to over half a million dollars in insider buys.

    With the company’s share price around $7.50, traders have a chance to buy in at a discount to the average recent insider buy. Cleveland-Cliffs is an iron ore mining company that operates internationally by selling its ore to integrated steel companies and producers.

    Action to take: With shares trading at just 2 times earnings—and 5 times forward earnings, they’re cheap. And with a 3.2 percent dividend yield, investors could do well buying here and taking advantage of the company’s 28 percent share drop in the past year.

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  • Given the struggling sector the company operates in, speculators may want to sit this one out, but traders could boost their returns by buying around $7.50 and selling $8 call options against their position to improve their returns. The January $8 calls go for about $0.75, or 10 percent of a $7.50 cost basis.