Insider Activity: Cleveland-Cliffs (CLF)

CFO and director buy shares.

  • Special: Wall Street Buying Frenzy on Under $5 Stock
  • On Thursday, August 22nd, Keith Koci, CFO of Cleveland-Cliffs Inc. (CLF)picked up 12,500 shares of the company, paying just over $101,000 to do so. This buy increased his total stake in shares by 17 percent.

    He was joined by director John Baldwin, who bought 7,000 shares, a $58,000 buy. That increased the director’s stake by 6.5 percent. Insiders have bought earlier in the month as well, and have been net buyers with no sales since May.

    Insiders have often paid prices as much as 17 percent higher than where shares currently trade.

    Cleveland-Cliffs is an iron ore mining company internationally, with large holdings in Michigan and Minnesota. It primarily serves integrated steel companies and producers.

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  • Action to take: With shares down 14 percent in the past year and with a forward PE ratio of just 5, this is a great price to start looking at any commodity company. Revenue growth has been positive, although the company’s earnings have dropped slightly in the past year. The company has a bit high of a debt load, however in a strong steel market shares could move far higher.

    Investors should look at shares at or under $8.50. And speculators may want to buy a January 2020 $8 call option, which can profit from any upside in shares over the next few months for just $1.10, or $110 per contract, compared to the $800 cost to buy 100 shares.