18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
15,580 Blog Posts

Quick Thoughts on $CLF Share Offering

After the close, $CLF announced a share offering of 50m shares to be used for the purposes of purchasing some of its senior notes — which as of tonight trades below par at around $95. This is precisely what a company on the mend is supposed to do — deleverage the balance sheet using the stock as the prime currency.

This is all very bullish — as it demonstrates a keen demand for the shares even at elevated levels.

Cliffs Natural Resources commences offering of 50 mln common shares or up to an aggregate of 57.5 mln Common Shares if the underwriter exercises its option (11.37 +1.85)

Co intends to use a portion of the net proceeds received from the Offering to fund the purchase of certain of its outstanding senior notes due March 2020, October 2020 and April 2021 pursuant to tender offers, including fees and expenses related to the tender offers. The Company intends to use the remaining net proceeds of this Offering for general corporate purposes, including the redemption of a portion of its outstanding senior secured notes and/or the repurchase of additional tender notes.

Bear in mind, this is a company in the midst of a major turn around. In spite of the recent surge, as you can see by the chart below, the stock is way off its highs — set back in 2011.

Note the earnings trends have been dreadful, but looking up.


And, have a look at the massive drawdown in revenues since the peak in 2011. If we are entering a new era of growth for the industry, those high end revenue numbers can be challenged again. Where do you think the share price will go if that were to happen?


The share offering is fodder, subterfuge, for the much bigger story. Take another look at the earnings that were reported this morning and understand that none of that reflected a prospective Trump fiscal stimulus boom.

CLF reported net earnings (attributable to Cliffs shareholders) of $79.1 million or 34 cents per share in the fourth quarter of 2016, versus net loss (attributable to Cliffs shareholders) of $60.3 million or 39 cents per share logged in the year-ago quarter.

Adjusted earnings (excluding one-time items) for the reported quarter came in at 41 cents per share, beating the Zacks Consensus Estimate of earnings of 25 cents.

Sales for the quarter came in at $754 million, surging 58.4% from $476 million in the prior-year quarter. Sales also beat the Zacks Consensus Estimate of $688.5 million.

Full-Year 2016

Cliffs recorded consolidated sales of $2.1 billion in 2016, up 5% from 2015. Net income attributable to the company’s shareholders in the year came in at $174 million or 87 cents per share, against a net loss of $788 million or $5.13 per share recorded in 2015.

This was a  significant report, as it represented the 1st revenue growth quarter since Q3 of 2013 and just the second growth quarter since Q2 of 2012. The last time we saw growth likes this was in early 2010 — as the stock made its way from $20 to $90 over the next two years.

Buy all dips.

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Neocon Never Trumper, Bill Kristol, Wants to Replace ‘Decadent’, ‘Lazy’ White Working Class with Immigrants

One of the most wretched people in America, Bill Kristol, Never Trumper and advocate for ruinous national policy to conduct unending wars abroad, thinks we need more immigrants to replace the lazy white sloth. He compared the recent hordes of savage hordes of immigrants to the Irish and Italians of 100 years ago — suggesting we need ‘new American’s to make it great again.

The only problem with his theories is that they are a fiction, not supported by facts.

Observe, here is the immigration trends, both legal and illegal. Note the spike of the immigration population and juxtapose it against US productivity and GDP growth. In spite of all of these new Irish and Italian fellows entering the country, it seems there is an INVERSE relationship between immigration and national prosperity.


(Estimated Illegal Immigrant Population)




And here are Bill Kristol’s reprehensible comments, clamoring for ‘new Americans’. The neocons have truly been exposed as globalist warmongering shills this election cycle — no better than the leftist retards running about the streets with cans of pepper spray.

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Nothing about last year’s market made sense, up until Trump got elected and people started to exude optimism over the specter of tax and regulatory cuts, in addition to fiscal stimulus. As a point in fact, the vast majority of last year’s gains were enjoyed after election night.

But here we are now and all of the HILLBOTS are enjoying National Pizza Day, decrying this market to be overbought and on the precipice of a horrid pullback. It’s funny how just about everything is politicized — with people showing their true emotions on topics they’re unable to control.

Nevertheless, I have a list of stocks readying to shoot higher — all heavily shorted and hated by Wall Street.

I derived this list using Exodus‘ proprietary technical ranking system, cross layering that over short squeeze data and a minimum volume screen for liquidity purposes.

These are my favorite.

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Tax Relief is Coming: These Companies Stand to Benefit the Most

Does it make sense to any of you that Obama kept American tax rates at 35% during his administration, all the while burdening business with heavy regulatory fees, in spite of the fact that he presided over an economy that failed to break the 3%+ growth GDP for the first time in America history?

If I was a conspiratorial type, I’d suspect he was trying to hamper the economy on purpose.

With President Trump promising to introduce ‘big league’ tax cuts within the next few weeks, companies who do the majority of their business domestically stand to benefit the most.

Source: Goldman Sachs, JP Morgan, Strategas Research



And here are companies who stand to benefit from repatriation of assets held overseas.


It’s worth noting, the Russell 2000 derives around 20% of its revenues overseas, compared to 35% for larger capped companies in the S&P 500 — making it the preferred index for those trying to play the Trump tax cuts.

For the past three months, the Russell is higher by ~12%, far outpacing the globalism themed S&P 500 of +7%.

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I’m a big fan of the steel markets. But instead of investing in that competitive shark pit, I’m buying the companies that make it possible. Think picks and shovels instead of mining for gold.

Twenty percent of my portfolio was long $CLF, heading into today. I did purchase an oil stock this morning, upping my net exposure to this wonderful market to 140%.

Here was my purchase of CLF, time stamped and emailed out to Exodus members a few weeks ago.

With today’s gains, I’m now up more than 10% for the year.

Aside from crushing estimates, CLF cited a newly rational behavior in the iron ore industry. If you’re not familiar, CLF provides the cokimg coal needed to produce steel.

Shares have exploded to the upside on this beat, especially since the stock is so heavily shorted.


Reports Q4 (Dec) earnings of $0.42 per share from cont ops, $0.16 better than the Capital IQ Consensus of $0.26; revenues rose 58.4% year/year to $754 mln vs the $668.21 mln Capital IQ Consensus.

“2016 was the year in which we finalized the execution of the operational, commercial and financial actions necessary to ensure Cliffs will have a great future. Among the actions accomplished last year are several new sales agreements entered with clients, including the renewal of our long-term supply contract with our largest customer, and a number of capital markets transactions that were successfully executed to reduce debt and extend our maturity runway.”

“the undeniable fact that the underlying business environment was far from ideal during almost all of 2016…A much more favorable business environment in the US and a newly adopted rational behavior in the international iron ore market support the work we have done internally in our company. With a much lower debt profile and extended maturities, and several new and more favorable commercial agreements that we put in place in 2016, we expect Cliffs to deliver strong and sustainable results in 2017.”

Outlook for 2017: Co expects to generate $510 mln of net income and $850 mln of adjusted EBITDA. This is based on the assumption that iron ore and steel prices will average levels consistent with the full month of January throughout 2017.

Key takeaway: the steel industry is on the cusp of extreme winship. Buy any company that helps galvanize steel, such as zinc plays. Currently, I’m long three: $TECK, $VEDL and $HBM.

Pardon my enthusiasm, but this is my core thesis, along with uranium.

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What a Mess: Shares of $TWTR Plunge After Posting Wretched Earnings Results

Twitter isn’t even remotely close to being an American company. With 4x as many monthly active users abroad, it truly is a global platform for news and information. The only problem with the company is they’ve got no idea how to monetize it.

More to that end, growth is at a standstill. User growth is barely moving, even with all of those fake accounts. Revenues are decreasing — because the model blows.

I’ve already detailed my experience with their ad platform and it was horrible.

Some libtards are pressing for Jack Dorsey to actually ban President Trump from Twitter. That’s the only positive thing the company has going for it. I was glad to see they’re not even thinking about doing such a ridiculous and petulant thing.

In their conference call, they said Trump’s use of platform shows it’s power. They did not see, however, a direct benefit from Presidemtial tweets.

See the problem with them, like so many other emotional people, is their inability to think outside the box. Instead of of pandering to their retarded leftist base, they should embrace the President’s affinity for their platform and work with him to set up a live QnA or something they can promote. They should be doing this with all celebrities and permit anyone to upgrade their accounts to host live webinars or QnAs, password protected if needed.

Instead, they wallow in their idiotic ideologies and suffer.

Details below, via Briefing.

Twitter beats by $0.04, misses on revs; issues disappointing guidance

Reports Q4 (Dec) earnings of $0.16 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.12; revenues rose 0.9% year/year to $717 mln vs the $738.74 mln Capital IQ Consensus.

Advertising revenue totaled $638 million, down slightly year-over-year.

Mobile advertising revenue was 89% of total advertising revenue.

Data licensing and other revenue totaled $79 million, an increase of 14% year-over-year.

US revenue totaled $440 million, a decrease of 5% year-over-year.

International revenue totaled $277 million, an increase of 12% year-over-year.

Total ad engagements were up 151% year-over-year.
Cost per engagement (CPE) was down 60% year-over-year.

Q4 adjusted EBITDA of $215 million, up 12% year-over-year, representing an adjusted EBITDA margin of 30%, versus 27% in 2015.

Average monthly active users (MAUs) were 319 million for Q4, up 4% year-over-year and compared to 317 million in the previous quarter.

Average US MAUs were 67 million for Q4, up 3% year-over-year and flat compared to 67 million in the previous quarter.

Average international MAUs were 252 million for Q4, up 5% year-over-year and compared to 250 million in the previous quarter.
Mobile MAUs represented 83% of total MAUs.

DAU grew 11% year-over-year, an acceleration from 7% in Q3’16, 5% in Q2’16, and 3% in Q1’16.

Expect advertising revenue growth to continue to lag that of audience growth in 2017. Advertising revenue growth may be further impacted by escalating competition for digital ad spending and the re-evaluation of our revenue product feature portfolio, which could result in the de-emphasis of certain product features.

Adjusted EBITDA to be between $75 million and $95 million, well below expectations;

Adjusted EBITDA margin to be between 17% and 17.5%
SBC to be between $125 and $135 million.

Total non-GAAP expenses to be flat to down 5%, compared to full year 2016;

SBC to be down 15% to 20%, compared to full year 2016;
Capital expenditures to be between $300 and $400 million.

2017 Focus- easier on-boarding and easier ways to tweet; starting to see this in the results; recently launched explore tab which makes it easier to organize.

Product changes and marketing big driver for DAU; changes making and relaunching; Seeing strong growth in Q1 for DAUs.
Made a big bet in Live Streaming in 2016.

Majority of revenue remains branded advertising; Will continue to invest in this area.

Why unable to monetize?:
Looked at a number of different ways of analyzing the business; organizational impact as well as fundamental trends;
Reorganization salesforce at the end of Q3; Performance of those accounts that changed hands are consolidated versus performance of those spending to standpoint that were not affected and there is no difference in the trend so there’s no quantitative analysis that shows had an organizational impact due to the restructuring; Doesn’t appear to have any impact our revenue performance or outlook that said similar to the fourth quarter

Implied range of revenue that’s quite wide and there’s a number changing factors; continue to focus on EBITDA and EBITDA margin as opposed to a narrow range of revenue.

Haven’t been able to leverage the more attractive ROI potential of acceleration and the double-digit growth in inventory.

Audience and engagement growth were sitting down to branded advertiser showing them the positive trends taking them to the increased inventory the higher scale the greater growth all of which can lead to better ROI; will get better allocation over the next 6 to 12 months; in addition to that trend it’s important to understand that in the quarter did see audience and engagement growth were sitting down to branded advertiser showing them the positive trends taking them to the increased inventory

Did see an acceleration in the competitive environment for branded advertising since mid-January.

Taking a step back and looking at simplify product and putting resources behind those products think have the greatest probability of success that can deliver the best long-term growth potential and that leverage competitive advantages; may cause them to be deemphasized products increasing revenue
NFL exceeded revenue and profitability expectations for TWTR and partners.

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Stocks Explode Higher After Trump Promises ‘Big League’ Tax Cuts

Trump supporters have waited, impatiently, for some of his platform promises to get enacted by GOP shilled congress. Apparently, we’re gonna get the long awaited tax cuts soon.

“Lowering the overall tax burden on American business is big league … that’s coming along very well. We’re way ahead of schedule, I believe. And we’re going to announce something I would say over the next two or three weeks that will be phenomenal in terms of tax,” Trump said.

On that news, markets went ape to the upside — hitting new record highs.

Related: My $CLF is ripping mustaches off today. As promised, I purchased an oil stock — details are in Exodus.

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Idiot Alert: HSBC Analyst Thinks the Market is Being Held Back by Trump’s Tweets

This is what you call living in a vacuum.

Herald van der Linde from HSBC believes the market’s hesitance to go up, uninterrupted of any pullbacks, is due to Donald Trump’s twitter account’s revelations. For the life of me, I cannot grasp how this high level retard deduced that annualized returns of 25-30% on the $SPY equates to a market struggling to find its footing. More to that point, the market is higher by more than 10% since election night — with numerous sectors (financials, commodities) higher by 30% during that time frame.

Donald Trump’s honeymoon with investors may come to a premature end as his frequent Twitter outbursts help kill off the initial burst of euphoria, according to Herald Van Der Linde, HSBC’s head of equity strategy for the Asia-Pacific region.

While leaders such as Japan’s Prime Minister Shinzo Abe and India’s Narendra Modi enjoyed comparatively lengthy periods of market strength after taking office, the U.S. optimism that welcomed Trump’s surprise victory in November shows signs of fizzling less than a month into his four-year term.

“You’re seeing the internal workings of the White House on Twitter, so you’re seeing the struggles going on in their Twitter feed,” Van Der Linde said in an interview at HSBC’s Hong Kong office. “When somebody comes in with a new agenda and the country seems to be moving in a new direction, that excites markets. With the Trump administration, we’re going to have a reality check and it might come sooner than you think.”

Investors are now adopting a wait-and-see approach to give Trump a chance to follow through on his post-election hype, but that will also be short-lived, Van Der Linde said. The HSBC strategist is one of a number of investors and analysts to question if the post-election rally was too fast and furious.

Classic care trolling.

The Trump rally was never sensical, as it was predicated upon the hopes and dreams of vast amounts of fiscal stimulus bills being passed by the GOP shilling congress — as well as regulatory reform and a commitment to lowering taxes. In spite of the fact that Trump’s policies threaten to menace China into a deleterious trade war, investors have given him the benefit of the doubt and have perpetuated a massive short squeeze for the ages.

With the S&P higher by ~3% for the year, and massive gains found in a sundry of sectors (nuclear +39%, aluminum +33%, gold +27%, copper +18%, hospitals +14%, semis +12%, autos +8% etc.) Mr. Herald Van Der Linde should open his eyes to the fact that markets have done nothing but exude optimism since the beginning of the year and pullbacks are a normal occurrence in any market — especially during one’s that shoot higher on the specter of an economic renaissance that is nothing more than a working theory.

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Based Upon the Laws of Mathematics, The Oil Sector is a Buy

God damn it. When was the last time I bought the oil sector? I recall an era in iBC history whence I walked upon these halls an oil man — completely devoid of human emotions — solely interested in mercenary profit. Alas, those days are coming back to iBC in short order — prompted by the infallible laws of mathematics.

According to Exodus, $XLE is oversold on all algorithms (3,6 and 12 month time frames). In addition to that, seasonality beckons.

Lastly and somewhat importantly, the sector has traded down 5% over the past month — providing bargain shoppers and math lovers alike with a supreme opportunity to delve into the dark tarry pits of BIG oil — drilling and injecting chemicals into the water supplies everywhere at your black heart’s behest.

BEHOLD, the trifecta of buy signals.



How do we play this to maximum effect? Stay tuned for tomorrow’s Fly Buy, fucked faces. In the meantime, here are some of the larger capped names in the drillers. Notice on the far right their YTD returns. We want to bargain shop here, not chase sloppy seconds.


Once I purchase of the aforementioned names, my exposure to this market will be in the magnitude of 140% long.

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Whole Foods Fails Again, Company Misses and Guides Lower

I remember when Wholefoods just hit the tri-state area and organic food was something of a novelty. I’d drive 45 min to the nearest store, just for the honor of spending $500 on overpriced balsamic vinegar and other first world delicacies.

Over the years, I’ve spent at least $500,000 on fucking groceries at that God forsaken store. Their prices keep going higher and the quality keeps sinking.

Whole Foods used to employ hipster junkies, now they have retards manning the cold cuts section, fucking up simple orders. All of the decent employees hate the company and tell me it’s a political hell hole — all the while prices go up.

Over the past 3 years, competition has truly offered a comparable alternative to Whole Foods and sales have begun to slumber.

They just reported earnings and they sucked, plus they warned.

Whole Foods prelim Q1 $0.39 vs $0.39 Capital IQ Consensus Estimate; revs $4.92 bln vs $4.98 bln Capital IQ Consensus Estimate

Whole Foods sees FY17 $1.33 vs $1.44 Capital IQ Consensus Estimate; cuts sales

Very seriously, I hope this company burns it hell. For the first time in over a decade, I’ve decided to boycott those motherfuckers by shopping anywhere but Whole Foods. I can no longer justify paying $50 for a single King crab leg, even though it’s gluten free and was fed nothing but grass until it was caught in the wild and killed, holistically.

That being said, I haven’t given up on organic foods, even if it is a scam. It makes me feeeeeel better. Ergo, it’s worth paying more — just not Whole Foods types more. Those fucking bastards.

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