2-for-1 targets Cliff Resources
"March saw no 2 for 1 split announcements," opines Neil Macneale who focuses on stock splits to create his model portfolio. Here's the latest from his 2-for-1 stock letter.
"The situation in which a month passes with no stock splits is becoming more the norm than the exception.
"I’m hoping this season of board meetings and earnings reports will result in at least a few split announcements, but until that happens, we will continue to improvise.
"For this month’s buy, I went back and looked at all the split announcements over the past year and a half that have not already wound up in the 2 for 1 portfolio.
"This list totaled 26 companies. Without exception they are all selling now for less than they were at the time of their split but, for some, the selloff has been dramatic. I am selecting Cliffs Resources (NYSE:CLF) from this group, primarily by the same methodology I have used for all my other picks.
"I did have to ignore or adjust some of the screens to account for the time passed since the CLF split announcement (3/11/08).
"Cliffs Resources, formerly known as Cleveland Cliffs, is a metallurgical coal and iron mining company supplying steel producers in North America and Asia. Forward P/E and Price-to-Book ratios stand at 6.41 and 1.34 respectively and the balance sheet is very strong.
"CLF was founded in 1847 and clearly knows how to make it through tough times. As the economy improves, here or abroad or both, Cliffs will be poised to supply the raw materials needed by the world’s steel makers."
