John Leonard, CFA
Special situations, micro-cap, contrarian, CFA

Noranda Aluminum Is An Attractive Way To Play The Eventual Rebound In Aluminum

Investment thesis

Noranda Aluminum (NOR) is attractive given the superior company-specific qualities and recently improving aluminum supply/demand situation. Investors earn a high yield while waiting for the expected turnaround.

Company overview

NOR is a vertically integrated producer of value-added aluminum products. NOR operates a primary metals (upstream) business and a rolled products (downstream) business.

The upstream business is one of the largest U.S. producers of primary aluminum and includes the following segments:

    The primary aluminum segment produces value-added products in several forms such as billet, rod, high purity sow and foundry. In 2012, NOR accounted for ~13% of total U.S. primary aluminum production according to CRU. The alumina refinery converts bauxite into alumina (the principal raw material used ...
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