It’s fair to wonder what more Alcoa (AA) has to do, or can do, to change sentiment on the Street. Global overproduction of aluminum remains a real threat, but LME spot prices have improved 16% since the end of the second quarter and Alcoa’s EBITDA margin improved 340bp and the shares are down about 4% as of this writing from when I last wrote about the shares on July 16.
Management continues to improve the house, but the neighborhood remains one that investors don’t want to visit (let alone invest in), despite improving prices, shortages in areas like beverage cans, and improving trends in other end-markets like autos. I absolutely do not look at Alcoa has a long-term holding, but with a near-term fair value in the $17 range, it’s harder to ignore an attractive potential short-term trade.
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Despite Rising Prices And Good Management Execution, Alcoa Can't Get Any Love
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