CLF is trading $11.50, down 8.2% with IV30™ exploding up 23.2%. The Symbol Summary is included below.
Provided by Livevol
CLF stock is down ~90% in three-years, it's risk as reflected by the option market is exploding and the stock is down on news of that the quarterly price for metallurgical coal fell to a six year low.
But CLF isn't down 90% (only) because of that... it's down because of how poorly it compares to its peers. A picture paints more than a thousand words, it erases 90% of a stock price.
... and here is that picture:
CLF is showing the largest loss in earnings and the second largest shrinkage in revenue over the last two-years relative to its peers. (Click Image to Enlarge)
Let's move to the five-year stock chart.
Provided by Yahoo! Finance
So, basically, a disaster... Here's what's going on in the guts of the firm. And disaster may be too small a word.
Total Revenue (TTM)
Total trailing-twelve-month revenue has fallen by ~20% in the last three (ish) years.
Total Revenue, 2-Year Growth %
Let's put the revenue drop into context by comparing CLF to a group of peers. We can see, over the last two-years, in terms of revenue growth, CLF is the second worst.
Gross Margin %
Revenue is dropping... and so is gross margin %. You know what's next...
Net Income (TTM)
CLF earnings have dropped from nearly $2B to to $101M in the last year. There has certainly been a recovery from the lows (which were actually losses), but it ain't good. How "ain't good?" Next visualization please.
Net Income, 2-Year Growth %
The bottom line (pun intended) is this: In terms of earnings two-year growth, there's CLF... and then there's everybody else. In the bad way...
Let's turn to risk pricing and the IV30™ chart in isolation, below.
Provided by Livevol
The implied volatility is the forward looking risk in the equity price as reflected by the option market (IV30™ looks forward exactly 30 calendar days).
In English, the red curve is the risk in future stock price movement. Risk has exploded up nearly 70% in a matter of weeks as the stock continues to break lower lows. The next earnings release for the company is due out in a bout a month. The risk (IV30) will likely peak and very well may break an all-time high.
Finally, the Options Tab is included below.
Provided by Livevol
Using the at-the-money (ATM) straddle we can see that the option market reflects a price range of [$8.60, $13.40] by the end of trading on November 21st.
- If you believe the stock will be outside that range on expiry or any date before then, then you think the volatility is too low.
- If you believe that range is too wide, and that the stock will definitively be in that range on expiration, then you think volatility is too high.
- If you're not sure, and can make an argument for either case, then you think volatility is priced just about right.
This is trade analysis, not a recommendation.
Options involve risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade options, and must meet suitability requirements.
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