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"Cliffs Natural Resources' (CLF -3.3%) announcement that it will cut capital spending by $100M in 2014 isn't helping shares today, and RBC analysts think CLF could breach its debt covenants.CLF must maintain a total funded debt/EBITDA ratio less than 3.5 and an EBITDA to interest expense ratio for the trailing four quarters of at least 2.5 - so far so good, but RBC says its current 2014 China iron ore price forecast is $119.25/metric ton, and if the average spot price for 2014 is $114.30 or below, CLF will trigger its total funded debt/EBITDA covenant."
I've considered (on more than one occasion) the convertible preferred shares (CLV), but I don't know, just not really interested in trying to play potential turnarounds and am more interested in boring, more consistent names. If I was going to look at Cliffs, the only thing I'd look at would be the preferred, I wouldn't be interested in the common (but that's just me.)
If anything, I'm looking to trim a little from some names and really don't have much interest in buying anything right now, even favorites like railroads.
Edited to add: I'm kinda interested in DSW (the shoe chain) down nearly 30%, but I dunno, I'm not that eager about owning it for a trade.
Comments
http://seekingalpha.com/news/1773753-breach-of-covenants-possible-at-cliffs-despite-cost-cuts-rbc-says
I've considered (on more than one occasion) the convertible preferred shares (CLV), but I don't know, just not really interested in trying to play potential turnarounds and am more interested in boring, more consistent names. If I was going to look at Cliffs, the only thing I'd look at would be the preferred, I wouldn't be interested in the common (but that's just me.)
If anything, I'm looking to trim a little from some names and really don't have much interest in buying anything right now, even favorites like railroads.
Edited to add: I'm kinda interested in DSW (the shoe chain) down nearly 30%, but I dunno, I'm not that eager about owning it for a trade.