By MIRIAM GOTTFRIED

Cliffs Natural Resources, North America’s largest producer of iron-ore pellets, is poised to benefit as cities in emerging markets build out their infrastructure. Iron ore is used in making steel.

Cliffs’ shares (CLF), which went over $75 in Friday’s rally, also are likely to stage a revival after dropping 20% last year as steel prices fell and two of the company’s coal mines were temporarily closed.

Europe’s credit crisis and fears of slowing growth in China also have weighed on the shares, although China’s demand for iron ore is expected to keep rising.

After declining modestly last year, Cliffs’ profits are expected to grow by 11% a year, propelled by improved technology and the newly found profitability of the company’s coal business.

Cliffs has been expanding its mining operations into eastern Canada, western Australia and Brazil, and its push outside the U.S. could help its shares climb as high as $115 in the next 12 months.

Cliffs could be a volatile stock in the short term, but investors are likely to be reassured by evidence of China’s continued growth. China produced about seven times more steel than the U.S. in 2011.

Cleveland-based Cliffs formerly was known as Cleveland Cliffs. The company borrowed heavily last year to buy Consolidated Thompson Iron Mines for $4.97 billion. Analysts expect cost-savings benefits from that acquisition to kick in quickly, while iron-ore prices should stay relatively high.

Cliffs’ management has said the company will exit the coal business if it doesn’t earn money in the first half of 2012.

Cliffs pays an annual dividend of $1.12 a share and yields 1.5%. Other mining stocks typically yield 3% to 4%. As Cliffs starts to pay down debt, its dividend should climb, yielding ironclad returns.

—Miriam Gottfried is a writer for Barron’s. For more stories, see barrons.com.

By JEANNE WHALEN

LONDON—Lawyers for News Corp. said that, during an IT upgrade in early 2011, the company deleted a key email from the inbox of James Murdoch, deputy chief operating officer, in which company counsel spelled out a plaintiff’s claim that voice-mail interception was widespread at the company’s now-closed News of the World tabloid.

The disclosure is problematic for News Corp., which is facing questions here from lawmakers and others about whether its U.K. newspaper unit, News International, attempted to hide evidence as a storm gathered over the practice of phone-hacking at the tabloid and the company’s handling of the issue.

James Murdoch

In a letter to Parliament, lawyers for a company committee looking into wrongdoing said the email was deleted in January 2011, about two weeks before police reopened a criminal investigation into phone hacking.

Parliament had asked the company for more information about the email after a printed copy of it surfaced late last year. Linklaters LLP, a law firm working for News Corp.’s Management and Standards Committee, in its response, said that in addition to discovering the deletion it found there were copies of it on two of Mr. Murdoch’s laptops, as well as on his personal assistant’s computer.

Linklaters said that PricewaterhouseCoopers, also working for the News Corp. committee, determined that a member of the IT department of the News International unit deleted the email from Mr. Murdoch’s inbox on Jan. 15, 2011, as part of an “email stabilisation and modernisation programme.” An electronic copy of the email was also deleted from the inbox of former News of the World editor Colin Myler “in a hardware failure which occurred on 18 March 2010,” Linklaters said.

It’s unclear whether other emails were lost in those events. The Linklaters letter didn’t specify, and News International declined to comment beyond the letter.

Mr. Murdoch declined to comment. News Corp. owns The Wall Street Journal.

Sent to Mr. Murdoch in June 2008, the email in question contains a chain of emails from the News of the World’s top editor and company lawyers discussing a suit, which was later settled, including the plaintiff’s claim that voice-mail interception was a common practice at the tabloid.

The December disclosure of the email —and the fact that Mr. Murdoch responded to it—raised questions about his long-held contention that he hadn’t been made aware of widespread wrongdoing at the tabloid until late 2010.

In December, Mr. Murdoch told a parliamentary committee he never read the full email chain from June 2008. “I was sent the email on a Saturday when I was not in the office. I replied two minutes later accepting a meeting and didn’t read the full email chain,” Mr. Murdoch said. “As I have always said, I was not aware of evidence of widespread wrongdoing or the need for further investigation” at that time.

Last month, a British High Court judge presiding over civil claims from alleged phone-hacking victims said he had seen evidence suggesting News Corp. executives activated a preconceived plan to hide emails in 2010, just before the phone-hacking matter mushroomed into a global scandal. The judge ordered News International to search a number of its computers for evidence of a plan to conceal phone hacking-related evidence.

A spokeswoman for News Corp. declined to comment on allegations of hiding evidence.

News Corp. long claimed that phone-hacking was limited to a single News of the World reporter jailed for the practice in 2007. That later proved untrue. Mr. Murdoch oversaw News Corp.’s U.K. newspaper unit from late 2007 to mid-2009.

Linklaters first found a printed copy of the email in a storage crate that appeared to contain documents from the office of Mr. Myler, the former News of the World editor.

Write to Jeanne Whalen at jeanne.whalen@wsj.com

By RIVA RICHMOND

It’s tougher than ever for would-be entrepreneurs to raise capital. Luckily, it’s also getting much easier to start a company on a small budget.

The rough economy is making it easier to cut deals that preserve cash—like winning better terms from suppliers or bartering for services. At the same time, even the smallest companies are saving big on overhead costs, such as labor and office space, by embracing practices like outsourcing and adopting new technologies.

“You’ve now got an easy and inexpensive path to small business,” says Rich Sloan, co-founder of StartupNation LLC, a San Francisco-based online community for entrepreneurs. “The reasons not to get into business have largely melted away.”

The key is to stay flexible—and be prepared to challenge basic assumptions about how a business should operate. Here’s a look at how some companies are getting creative about saving money.

Use Less Space

One easy way to slash costs is to rethink the traditional office. You can cut down the amount of space you need—or eliminate it entirely—by allowing Internet-connected employees to work remotely or hiring contract workers who have their own space. This lets you avoid getting saddled with a long-term lease for more space than you need, says Steve King, a partner at Emergent Research, a Lafayette, Calif., research firm and consultancy.

Some companies are cutting their space needs by sharing offices with other businesses. Jordan Stolper, chief executive of gliider, which offers an online travel-research tool of the same name, splits a 900-square-foot office with two other Internet start-ups in Brooklyn, N.Y. The arrangement not only keeps costs down—Mr. Stolper estimates it would cost him $20,000 more per year to rent the entire space himself—but also provides colleagues to bounce ideas off.

Mr. Stolper found his officemates through friends, but you don’t necessarily have to do the matchmaking yourself. Some businesses manage the arrangements for you: They lease out portions of an office to different workers or companies and often provide shared amenities such as a receptionist and Internet service.

Only Pay for What You Use

All new business owners should scrutinize their fixed costs and “try to turn everything you can into a variable cost—and a variable cost in which you actually have some flexibility to get rid of it or change it,” says Mr. King. Doing so reduces the need for upfront capital and the risk of runaway costs when things are slow, while allowing you to scale up quickly when orders start pouring in.

For instance, Momentum Billing LLC, a San Diego medical-billing company serving doctors’ offices, built its billing product on top of a Web-based platform from AdvancedMD Software Inc. of Draper, Utah, and pays AdvancedMD based on how many clients it has. To move and store client data and comply with federal data security and privacy laws, founder Monty Miller turned to Egnyte Inc., of Mountain View, Calif., which charges him for only the server space he uses.

Likewise, Mr. Stolper rents server space for his business, for about $80 a month. “This helps us manage costs while we’re in development, and will let us manage growth once we’ve launched,” he says.

The steep decline in costs for things like computing “has made creating something, that first leap, all the more possible,” he adds. Buying a server and hiring someone to manage it can run tens of thousands of dollars a year.

Even employees can become a variable cost by using the “Hollywood model,” Mr. King says, where you assemble a team of independent contractors for a project and then dissolve the group when it’s over. The approach allows you to “tap talent around the world” without making long-term commitments.

Of course, this approach has drawbacks. You may not be able to get the talent you want when you want it, and keep in mind that, being free agents, they’re more interested in building their business than in building yours. You’re also more likely to lose a contract employee than a regular one.

Moreover, there are potential tax hassles if the Internal Revenue Service decides that your contract workers are actually employees. “The best way to avoid problems is to make sure the contractor has other clients and/or works at least part time off-site,” says Mr. King.

Find Creative Deals

With so many businesses suffering these days, many suppliers are willing to accept nontraditional deals to keep themselves afloat. For instance, if you have purchase contracts for your product, some suppliers are now willing to help with upfront capital needs if it means they’ll get your business, says Ken Yancey, chief executive of Score, a Washington, D.C., nonprofit association whose executive volunteers counsel small companies around the country.

Yafa Sakkejha made a deal with her father that’s enabling her to get House of Verona, a summer health-retreat business, off the ground. He agreed to “incubate” her fledgling company by giving her rent-free use of Blue View Chalets, his winter ski-resort property in Canada’s Blue Mountains, for the first year and by fronting some of her larger initial expenses.

Ms. Sakkejha is using her savings to repay Blue View half of the expenses it incurs for her and hire health experts, a fitness trainer and caterers. If her business takes off, both parties win. She begins to build her own business, and her father gains a summertime revenue stream from the property.

What’s more, some businesses will make barter deals instead of insisting on cash payments. Christine Marchuska started an eco-friendly fashion label, cmarchuska LLC, in November, using $40,000 in savings and severance she got after being laid off from Wall Street.

To keep her marketing costs low, she has found young photographers, videographers and models who will work free to get material for their portfolios. A friend who is starting a public-relations firm is handling publicity. “It usually it turns out so much better because everyone is so driven,” Ms. Marchuska says. “They’re working harder.”

Of course, bartering works better for services than for products. It’s easier, say, for a model to pose for a couple of hours in exchange for exposure than for a fabric maker to hand over free cloth. And the practice is more common for start-ups and very small businesses with limited cash.

One final caveat. As you look for ways to cut costs, don’t shortchange crucial functions. For instance, you don’t want to outsource tasks that are central to your business, such as sales, or involve special skills you bring to the table. You should outsource only the tasks that are essentially commodity jobs, like running your servers.

“The key is understanding what is core to your business,” Mr. King says. “Things that are noncore is where you try to remain flexible.”

–Ms. Richmond is a writer in New York. She can be reached at reports@wsj.com.

Less than a year after launching Little Big Farm Foods in September 2010, Fern Phillips received an order five times larger than any she’d gotten previously for her private-label dry-baking mixes.

But joy quickly turned into panic as Ms. Phillips, 57 years old, realized she didn’t have enough start-up capital to pay for the ingredients and packaging she needed to fill it. She says her credit cards were maxed out and she’d already spent a loan and line of credit from her bank on other business expenses.

Ms. Phillips shared her plight with a friend, who told her about Pawntique.com, an online pawn shop that offers short-term cash loans in exchange for collateral. She decided to give the alternative lender a try and offered up a James Robinson sterling flatware set—a family heirloom dating back three generations that she valued at about $30,000. Less than 48 hours later, she received a $20,000 loan valid for three months at a service fee of 3% per month, or roughly $1,800 total. She managed to pay it off in slightly less than two months for a reduced service fee of $1,100.

“It certainly saved us,” says Ms. Phillips, a former independent consultant whose business is located in Portsmouth, N.H.

If you need a quick cash infusion for your start-up, a pawn shop may be able to help—and for less than you might expect. Pawn shops provide immediate short-term loans in exchange for collateral and a service fee, which is usually a percentage of the amount borrowed. While that fee has historically been substantially higher than what most traditional lenders require, a more affordable type of pawn shop has emerged in recent years on the Internet.

New Web-based pawn shops, including Pawntique.com, Pawngo.com and Pawnup.com, demand less capital to operate than their bricks-and-mortar counterparts because they lack retail storefronts. As a result, they can charge monthly service fees as low as 3%—far less than the industry’s overall average of 10% to 20%, according to a September report from market-research firm IBISWorld.

In general, borrowers complete an online form describing the items they wish to offer as collateral. In some cases, they can upload photos. Next, the online pawn shop makes an assessment, which is ideally followed by an offer.

If a loan agreement is reached, the borrower is shipped packaging materials, often at no cost and with insurance included. The borrower then mails the items that he or she wants to pawn. Once the shop receives those goods, it will wire the loan amount to the borrower, usually within 48 hours, providing the collateral received meets the shop’s expectations.

A benefit to pawn loans, whether conducted online or in a store, is that no credit check is required. And if the loan can’t be repaid, the collateral is relinquished and the transaction is complete, unless an extension is requested and granted. In most cases, borrowers aren’t penalized for repaying pawn loans early.

Pawn loans typically run for one to three months. Commonly pawned items include jewelry, precious metals, fine art and collectibles, according to shop owners. But they say they’re also accepting more business assets, such as computers, printers and construction equipment.

Of course, small-business experts say entrepreneurs should carefully consider all their borrowing options before taking out a pawn loan, given pawn shops’ high fees and the potential for losing the collateral.

If bank financing isn’t possible—often the case for first-time entrepreneurs—ask relatives or friends for a loan, or try selling unwanted items outright for cash, says John K. Paglia, a finance professor at Pepperdine University in Malibu, Calif. Other alternative lenders, such as peer-to-peer services like Prosper.com and LendingClub.com, may offer better rates than pawn shops or even banks.

“Put the pencil to the paper,” Mr. Paglia says, adding that if an entrepreneur feels he or she has no choice but to risk losing personal assets to keep a business afloat, it’s possible the venture is better off being put to bed.

Jennifer Diederich of Norwalk, Conn., determined that a pawn loan was essential and affordable for her start-up, Advanced Facial 3D Imaging, a provider of medical and dental imaging services. The 55-year-old says she needed the money to buy two pieces of equipment and had been denied a loan from her local bank. She also unsuccessfully tried to borrow money from family before deciding in October to pawn 70 gold and silver coins and six diamonds.

Ms. Diederich says she launched her business because she has struggled in recent years to find steady full-time work in her field—dentistry. The equipment she needed cost roughly $70,000 and she got a three-month loan for about half that amount from Pawngo.com, for a service fee of 4%. She paid for the difference with her savings.

“I never thought about pawning anything,” says Ms. Diederich, adding that her start-up is now up and running.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

By RACHEL LOUISE ENSIGN

The readers’ picks narrowly beat the darts in Sunday Journal’s 44th Investment Dartboard Contest, extending their winning streak to four in a row.

But the tepid market of the second half of 2011 led both the readers and the darts to overall declines.

The reader with the biggest gain in the six months ended Dec. 31 was Minneapolis Star Tribune reader Evan Stein. His stock, Caribou Coffee, was the only reader pick to end in the green, up 5.4%.

“I’m a big fan of the coffee,” says the Indiana University undergraduate. “With the new year and how well coffee’s doing right now, there could be a [further] expansion.”

Christine Luttermoser’s selection, retailer Abercrombie & Fitch, fared the worst with a 27% decline. That’s likely because the retailer tends to be “higher priced and they don’t put things on sale nearly as much as other companies,” says the Harrisburg Patriot News reader.

As a group, the six readers’ picks fell 12.8%, compared with a 13.1% loss for the six stocks chosen randomly by darts thrown at stock pages. Sunday Journal contributor Sarah E. Needleman’s picks were up 1% overall.

The Dow Jones Industrial Average was down nearly 2% over the same period.

The darts have historically beaten the readers, with 26 wins out of 44 contests.