Analyst Explains Why He’s Buying More Cleveland-Cliffs (CLF)- ‘Leave Rare Earths Aside’

9We recently published 10 Stocks Everyone’s Discussing Amid Latest Earnings Season. Cleveland-Cliffs Inc (NYSE:CLF) is one of the stocks everyone’s discussing.

Jim Lebenthal, Chief Equity Strategist at Cerity Partners, explained in a recent program on CNBC why he’s buying more Cleveland-Cliffs Inc (NYSE:CLF) shares despite recent declines. The stock surged following the steel and mining company’s latest quarterly results, but fell sharply after Wells Fargo downgraded it, calling enthusiasm around rare earths an overreaction. However, Lebenthal said he likes the stock for reasons that are not related to rare earths.

Here’s how Lebenthal defended the stock:

“The story is changing. Leave rare earths aside, okay? That is not what excites me. But the narrative is changing here. Auto demand is picking up. They’ve just signed contracts with all the major OEMs at favorable prices for the next two to three years. And we see what’s going on with GM today. I don’t know if we’ll get to that, but we see what’s going on. Auto production is going to pick up. And that’s one-third of their business. Probably more important than that is they’ve signed a memorandum of understanding with an international steel company that wants to leverage idle assets, idle plants at Cleveland-Cliffs. The story has changed.”

Photo by AlphaTradeZone

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Disclosure: None. This article is originally published at Insider Monkey.