With the release of China’s February 2014 lending data, Axiom Capital Research analyst Gordon Johnson drew the conclusion that “the news was again poor. More specifically, Feb. ’14 bank and non-bank lending collapsed to 644.5bn (from 1,319bn CNY in Jan. ’14) and 409.4bn CNY (from 1,232bn CNY in Jan.’14), respectively.”
Gordon observed that, “With steel inventory at the 86 large and mid-sized steel mills in China still at worrying levels, against a backdrop of port iron ore inventories at record levels, as we have warned over the past 6-to-7 weeks, we believe the capitulation of the port stock hoarders we have been worried about for months now is upon us.”
And he added that, “Barring new stimulus from the Chinese government in some form (which we expect to emerge as a cut to the RRR in June), the bounce in iron ore prices during the seasonally strong period in China (i.e., Mar.-Apr.), when it comes, will likely disappoint in pricing terms.”
The latest Robinhood Investors Conference is in the books, and some hedge funds made an appearance at the conference. In a panel on hedge funds moderated by Maverick Capital's Lee Ainslie, Ricky Sandler of Eminence Capital, Gaurav Kapadia of XN and Glen Kacher of Light Street discussed their own hedge funds and various aspects of Read More
Because Gordon believes that iron ore prices are “likely to face further downside over the near term,” during a time where China should be seasonally strong, Gordon is recommending SELL Cliffs Natural Resources Inc (NYSE:CLF), SELL Rio Tinto plc (NYSE:RIO), SELL United States Steel Corporation (NYSE:X) and SELL Joy Global Inc. (NYSE:JOY).
Gordon is ranked number 2 out of 2444 analysts and has a 13.4% average return with a 79% success rate of recommendations.
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