Supply Issues Creating A Windfall For Alcoa

While I liked Alcoa (AA) three months ago, and thought that the company could benefit from some supply curtailments, I didn’t expect the significant market disruptions that have pushed spot aluminum prices on the LME to over $2,528/mt (versus less than $2,100 in December). Now, though, the market is dealing with section 232 limitations, problems with the Alunorte facility, and U.S. sanctions against Russian producers, pushing the markets into more substantial supply deficits.

Although Alcoa has had a good run over these last three months, and I don’t view it as a long-term holding, there may still be some worthwhile upside left at these levels.

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Supply Issues Creating A Windfall For Alcoa

Investopedia: Alcoa's Fourth Quarter The Best Of A Bad Situation

A lot of investors spend their time looking for best of breed investments; the best-run companies within particular sectors. However, what should an investor do when the entire breed is in disrepute and on the way to the pound? Alcoa (NYSE:AA) does indeed have a claim on being one of (if not the) best aluminum company out there, and is undervalued on long-term averages, but investors will struggle to get ahead with this name if aluminum prices don't rebound. (For more, see Earning Forecasts: A Primer.)

A Tough End to the Year  
Alcoa arguably made the best of a bad situation in the fourth quarter. Results weren't bad relative to expectations, though there was some "noise," but absolute performance certainly showed some weakness.

Read the full piece here:
http://stocks.investopedia.com/stock-analysis/2012/Alcoas-Fourth-Quarter-The-Best-Of-A-Bad-Situation-AA-CENX-KALU-NOR0111.aspx

Investopedia: Can Alcoa's Recovery Continue?

It is almost hard to believe that Alcoa (NYSE:AA) shares went for about $5 a share in early 2009, but that was the depth of pessimism about global growth. Since then, investors are a lot more positive on the fortunes and future of aluminum, but the question remains whether Alcoa can continue to reward its supporters.

A First Quarter That Didn't Quite Make It 

Alcoa had a decent quarter and pricing in the aluminum market is getting better, but things were not quite as good as analysts had hoped. There was a big spread in analyst estimates (about $1.1 billion), and though Alcoa only missed the average by a relatively small amount, the company was clearly a ways off the high end of the range. Profitability was solid and on target, but that only seems to matter when it's significantly better or worse than analysts hope.

It really was not a bad quarter, though. Sales were up 5% from last year (and up 22% sequentially), and EBTIDA snapped back to the tune of 22% sequential growth and 60% annual growth.

To read the full article, please click here:
http://stocks.investopedia.com/stock-analysis/2011/Can-Alcoas-Recovery-Continue-AA-FCX-AWC-ACH-RIO-KALU-DOW0413.aspx