Dalio and Other Money Managers Are Turning to Cleveland-Cliffs

Ray Dalio increases stake in CLF

In a significant development for Cleveland Cliffs (CLF), billionaire investor Ray Dalio purchased a stake in CLF stock in the first quarter. His hedge fund, Bridgewater Associates, has taken notice of the stock after its steep ascent in the face of President Trump’s tariffs on steel imports.

On the whole, money managers increased their holdings in the stock by 13.9 million shares during the first quarter. Bridgewater added 1.9 million CLF shares to its holdings, increasing its stake by 56.7%. It’s the fund’s second-largest position increase in its portfolio of US-listed securities.

Dalio and Other Money Managers Are Turning to Cleveland-Cliffs

Other money managers increase positions

Fidelity Management & Research has tripled its stake in the miner to become its third-largest shareholder. Millennium Management, which initiated a new position in the stock in the fourth quarter, increased its position by 719% in the first quarter. Commerzbank Aktiengesellschaft increased its stake in CLF stock by 39% that quarter.

Tariffs to benefit Cliffs

You might recall that on February 16, the U.S. Department of Commerce recommended a broad range of duties on steel and aluminum imports. As expected, US steel stocks (SLX) soared. U.S. Steel Corporation (X) rose the most, followed by AK Steel (AKS), Nucor (NUE), and Cleveland-Cliffs. On March 1, President Trump announced a 25% import tariff on steel imports, which further stoked the stock prices of major US steel companies as well as Cliffs. Along with these duties, Cliffs has an enviable position of being the sole external iron ore pellet supplier to the US domestic steel industry, with barriers to entry quite high. That might have prompted money managers to consider CLF stock.

Note that these holdings are from the end of March, and they may have changed since then. They were also created before Cliffs reported its first-quarter earnings, which missed on earnings but were positive from a guidance perspective.

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