Why Cliffs Natural Is Poised to Bounce Back

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Cliffs Natural Resources gained 3% today after Cowen upgraded the iron ore miner from underperform to market perform.

So what: Along with the upgrade, analyst Anthony Rizzuto, Jr. boosted his price target to $20 (from $11), representing about 11% worth of downside to yesterday's close. While momentum investors might be turned off by the stock's big plunge over the past year, Rizzuto believes that the downside might now be limited given a few positive events that are likely to unfold in Cliffs' not-so-distant future.

Now what: According to Cowen, Cliffs' operations have plenty of room to improve. "We have identified several potential catalysts that could have positive implications for Cliffs Natural Resources," noted Cowen. "In our view, the most important being the possible structural changes that may be implemented by a new management team." More important, with the stock still off a whopping 50% from its 52-week highs, Cliffs' downside might be limited enough to make betting on those catalysts a particularly savvy move.

Interested in natural resources?
Then you owe it to yourself to discover the most precious resource in the history of the world. It's not gold. Or even oil. But it's more valuable than both of them. Combined. And here's the crazy part: one emerging company already has the market cornered... and stands to make in-the-know investors boatloads of cash. We reveal all in our special 100% FREE report The 21st Century's Most Precious Natural Resource. Just click here for instant access!

The article Why Cliffs Natural Is Poised to Bounce Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.