in the current session clevelandcliffs inc nyseclf is trading at 2174 after a 343 gain over the past month the stock increased by 881 and in the past year by 16288 with performance like this longterm shareholders are optimistic but others are more likely to look into the pricetoearnings ratio to see if the stock might be overvalued assuming that all other factors are held constant this could present itself as an opportunity for shareholders trying to capitalize on the higher share price the stock is currently below from its 52 week high by 1799 the pe ratio is used by longterm shareholders to assess the companys market performance against aggregate market data historical earnings and the industry at large a lower pe can either represent a companys poor future earnings potential or a buying opportunity relative to other stocks it shows that shareholders are less than willing to pay a high share price because they do not expect the company to exhibit growth in terms of future earnings depending on the particular phase of a business cycle some industries will perform better than others clevelandcliffs inc has a lower pe than the aggregate pe of 1626 of the metals  mining industry ideally one might believe that the stock might perform worse than its peers but its also probable that the stock is undervalued pe ratio is not always a great indicator of the companys performance depending on the earnings makeup of a company investors can become unable to attain key insights from trailing earnings