I know these markets are brutal, and this company is hardly alone in trading near the bottom of a cavernous one-year trading range, but these cliffs of coal and iron ore are a central artery to the heart of the world's steel industry.
Perched on top of the world's industrial supply chain, miners like Cliffs Natural Resources
Under trying conditions, Cliffs logged $53.9 million in net income for the quarter despite a $209.1 million set of charges and writedowns. The company sacrificed some $90 million to back out of the Alpha Natural Resources
Gazing past the investment losses and currency hedges gone awry, Cliffs' recorded a 30% increase in cash from operations in the fourth quarter, and a 195% boost for all of 2008, to $853 million. Despite a very tough fourth quarter for the industry, Cliffs managed to increase its overall sales margin by 75% on strong iron ore prices, easily offsetting slightly negative margins from the North American coal unit. The company is scaling back production substantially, which will likely keep costs elevated, but management has demonstrated its adaptive prowess in the past.
With very positive cash flow, $179 million in cash and equivalents, and $750 million in available credit, I consider Cliffs Natural Resources among the best-positioned raw material miners to ride out this acute disruption to the markets of steelmakers like United States Steel
In my opinion, Peabody Energy
The "Coal" tag within the Motley Fool CAPS community lists 21 coal companies. Find out what other investors are saying about the stocks you're watching, or share your Foolish thoughts with us. CAPS is free and fun!
Fool contributor Christopher Barker is the Nat King of Coal and the wild boar of iron ore. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Cliffs Natural Resources, Peabody Energy, and Vale. POSCO is a Motley Fool Income Investor recommendation. The Motley Fool has a disclosure policy.
More from The Motley Fool
Why Toll Brothers, Cleveland-Cliffs, and Edison International Slumped Today
Find out which of these stocks suffered from poor earnings results.
Shares of Cleveland-Cliffs Went on a Wild Ride in November
The market keeps focusing on iron ore prices, but this is what investors should keep their eye on.
Why This Iron Ore Miner's Stock Fell 16.6% in October
This global iron ore miner had a tough month, but it wasn't all bad news. Here's what you need to know.