Investors Buy High Volume of Call Options on Cleveland-Cliffs (NYSE:CLF)

Key Points

• Unusual options activity: Investors bought 61,622 call options on Cleveland-Cliffs—about a 42% increase vs. typical daily call volume—as the stock traded up to $9.80 on the session.
• Earnings beat but company remains unprofitable: CLF reported ($0.40) EPS (beating ($0.44)) and $4.92B in revenue, yet shows negative ROE and net margin and analysts expect roughly ($0.42) EPS for the year.
• Mixed ownership and analyst signals: CEO Lourenco Goncalves sold 3,000,000 shares (COO sold 200,000) even as institutions like Vanguard and State Street increased positions, while the consensus rating averages to "Reduce" with a $11.66 price target.

Cleveland-Cliffs Inc. (NYSE:CLF - Get Free Report) was the recipient of some unusual options trading on Friday. Stock investors bought 61,622 call options on the company. This is an increase of approximately 42% compared to the typical daily volume of 43,472 call options.

Cleveland-Cliffs Price Performance

NYSE CLF traded up $0.71 during trading on Friday, reaching $9.80. The company's stock had a trading volume of 11,992,991 shares, compared to its average volume of 18,057,119. The stock has a market capitalization of $5.59 billion, a PE ratio of -4.19 and a beta of 1.91. The company has a debt-to-equity ratio of 1.29, a current ratio of 2.02 and a quick ratio of 0.50. The firm has a fifty day moving average of $9.41 and a 200 day moving average of $11.72. Cleveland-Cliffs has a one year low of $5.63 and a one year high of $16.70.

Cleveland-Cliffs (NYSE:CLF - Get Free Report) last announced its earnings results on Monday, April 20th. The mining company reported ($0.40) earnings per share for the quarter, topping analysts' consensus estimates of ($0.44) by $0.04. The business had revenue of $4.92 billion for the quarter, compared to analyst estimates of $4.84 billion. Cleveland-Cliffs had a negative return on equity of 15.48% and a negative net margin of 6.42%.The company's quarterly revenue was up 6.3% compared to the same quarter last year. During the same period in the prior year, the company earned ($0.92) EPS. Analysts expect that Cleveland-Cliffs will post -0.42 EPS for the current fiscal year.

Insider Activity

In related news, COO Clifford T. Smith sold 200,000 shares of the stock in a transaction dated Tuesday, February 17th. The stock was sold at an average price of $10.46, for a total transaction of $2,092,000.00. Following the sale, the chief operating officer owned 560,529 shares of the company's stock, valued at approximately $5,863,133.34. This represents a 26.30% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CEO Lourenco Goncalves sold 3,000,000 shares of the stock in a transaction dated Wednesday, February 11th. The stock was sold at an average price of $12.42, for a total value of $37,260,000.00. The disclosure for this sale is available in the SEC filing. Insiders own 0.95% of the company's stock.

Hedge Funds Weigh In On Cleveland-Cliffs

Several institutional investors have recently modified their holdings of the company. Vanguard Group Inc. increased its position in shares of Cleveland-Cliffs by 13.4% during the 4th quarter. Vanguard Group Inc. now owns 54,391,397 shares of the mining company's stock valued at $722,318,000 after purchasing an additional 6,447,462 shares during the last quarter. State Street Corp increased its position in shares of Cleveland-Cliffs by 14.2% during the 4th quarter. State Street Corp now owns 29,278,156 shares of the mining company's stock valued at $388,814,000 after purchasing an additional 3,632,150 shares during the last quarter. Castle Hook Partners LP increased its position in shares of Cleveland-Cliffs by 572.4% during the 4th quarter. Castle Hook Partners LP now owns 18,083,029 shares of the mining company's stock valued at $240,143,000 after purchasing an additional 15,393,507 shares during the last quarter. Maple Rock Capital Partners Inc. increased its position in shares of Cleveland-Cliffs by 90.1% during the 4th quarter. Maple Rock Capital Partners Inc. now owns 12,358,230 shares of the mining company's stock valued at $164,117,000 after purchasing an additional 5,855,830 shares during the last quarter. Finally, Geode Capital Management LLC increased its position in shares of Cleveland-Cliffs by 14.7% during the 4th quarter. Geode Capital Management LLC now owns 10,039,851 shares of the mining company's stock valued at $133,372,000 after purchasing an additional 1,286,042 shares during the last quarter. 67.68% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

A number of brokerages recently issued reports on CLF. Citigroup increased their price objective on Cleveland-Cliffs from $11.00 to $13.00 and gave the stock a "neutral" rating in a report on Monday, February 9th. Argus raised Cleveland-Cliffs to a "hold" rating in a report on Monday, April 6th. JPMorgan Chase & Co. dropped their price objective on Cleveland-Cliffs from $13.00 to $10.00 and set a "neutral" rating on the stock in a report on Tuesday, April 14th. Wells Fargo & Company dropped their price objective on Cleveland-Cliffs from $12.00 to $9.00 and set an "equal weight" rating on the stock in a report on Thursday, March 19th. Finally, Wall Street Zen raised Cleveland-Cliffs from a "sell" rating to a "hold" rating in a report on Saturday, February 14th. One equities research analyst has rated the stock with a Buy rating, seven have given a Hold rating and two have issued a Sell rating to the company's stock. According to data from MarketBeat.com, the company has an average rating of "Reduce" and an average price target of $11.66.

About Cleveland-Cliffs

Cleveland-Cliffs Inc is a leading North American producer of iron ore pellets and flat-rolled steel products. Tracing its roots to 1847, the company has evolved from an iron-ore mining concern in the Great Lakes region into a fully integrated steelmaker. Today, Cleveland-Cliffs operates iron ore mining complexes in Michigan and Minnesota as well as steelmaking and finishing facilities across the United States.

The company's integrated platform begins with direct control of key raw materials, including iron ore and scrap, and extends through every stage of steel production.

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