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Alcoa, Inc (NYSE:AA) again fell short on earnings with an adjusted loss of 3 cents per share. The picture gets much brighter with world demand for aluminum growing at about 7 percent. Revenue increased by 6% to over $6 billion for the quarter, unfortunately the cost of operations was also on the increase. It is expected that earnings growth momentum will turn very positive next year and the following year.

Alcoa is the world's largest producer of aluminum. It is operational worldwide within 31 countries. It also has joint-venture relations with other large international mining, smelting, fabricating and recycling companies.

Selected peers for comparative analytics are graded below on my Report Card along with AA. My four selected companies include: Thompson Creek Metals Company, Inc. (NYSE:TC), Southern Copper Corp. (NYSE:SCCO), Aluminum Cop of China ADR (NYSE:ACH), and Century Aluminum Company (NASDAQ:CENX). At this time, I suggest there is no immediate prospect to buy or short any of these securities.

Alcoa along with the above peers will substantially increase earnings growth over the next couple of years. This seems to be the theme within the basic materials' and mining sector. I am longer-term bullish on AA and these peers, but I cannot find enough current fundamental or technical support for considering these companies as timely buys.

Fundamental Valuation

Valuation Table for: AA, TC, SCCO, ACH, CENX

Symbol

Price

Projected Price

Fundamental Valuation , Technical Chart & Consensus Opinion (all are nearly identical)

AA

9.1

plus 8+% / minus 16+%

This fundamental valuation is very average and answers why the shares are not performing well. Technically, it is in a long-term down trend. Leading technical indicators are not favorable to take near-term bullish positions. Consensus opinion also does not support holding or buying. Caution is advised at current prices.

TC

4.3

plus 12+% / minus 14+%

TC is a small company. This fundamental valuation is above average and answers why the shares are not performing well. Technically, it is in a severe long-term down trend. Leading technical indicators are not favorable to take near-term bullish positions. Consensus opinion also does not support holding or buying. Caution is advised at current prices.

SCCO

31

plus 5+% / minus 20+%

This fundamental valuation is above average and answers why the shares are only moving sideways. Technically, it is in a sideways pattern. Leading technical indicators are not favorable to take near-term bullish positions. Consensus opinion also does not support holding or buying. Caution is advised at current prices.

ACH

11

No Meaningful Projected Price

ACH does not provide good information and data. This fundamental valuation is below average and answers why the shares are not performing well. Technically, it is in a long-term down trend. Leading technical indicators are not favorable to take near-term bullish positions. Consensus opinion also does not support holding or buying. Caution is advised at current prices.

CENX

100

plus 6+% / minus 20+%

This fundamental valuation is above average and answers why the shares are not performing well. Technically, it is in a long-term down trend. Leading technical indicators are not favorable to take near-term bullish positions. Consensus opinion also does not support holding or buying. Caution is advised at current prices.

Source of raw data: Yahoo Finance.

Projected Price is calculated and produces a probable range of the current price over the coming one to three months. Fundamental Valuation & Technical Opinion is calculated and translated into a Rating. See the below Report Card. I often suggest cash and patience as an alternative.

Report Card

Company Symbol

Fundamental - weighting (40%)

Technical - weighting (35%)

Consensus - weighting (25%)

Rating: ( 0 - 100 / A - F )

AA

Very Poor

Poor

Poor

59 / F

TC

Good

Very Poor

Poor

68 / D

SCCO

Good

Good

Very Poor

59 / F

ACH

Good

Very Poor

Very Poor

52 / F

CENX

Good

Very Poor

Very Poor

63 / D

Rankings range from Excellent to Very Poor. Ratings below 90 / A are not current (never are) candidates for buying. Ratings above 60 / F are not current (never are) candidates for short selling. All information and data are in constant flux and can change from a neutral rating (60 to 90 / D to B) to a buy or short sale in just a few weeks.

Industry Status

The non-ferrous metals and mining industry is and has been very weak both fundamentally and on the charts. AA is technically in sync with its fundamentals and is in stride with its industry. Normally, that would be a positive remark. Looking at the above tables and the chart below tells us a very different story. These facts make clear that buying shares of these companies is currently not prudent. My criterion for taking a bullish position is that the company must have the prospect within its fundamental valuation and technical chart to out-perform the general market, its sector and industry group.

(click to enlarge)

Market Status

The general market is currently over valued, over bought and is showing signs of serious deterioration, especially in the area of breadth. This means that you must consider holding cash or perhaps take bearish positions in the coming weeks.

My analytic focus is investing wisely, e.g. taking advantage of the bull / bear cycles as they occur within the overall marketplace. Integrating modern and conservative fundamental analytics within these technical cycles means maintaining a process of the thorough and ongoing analytics of many companies, sectors and industry groups.

Professors Opinion

There is an old saying in the world of education: A good professor can identify an excellent and talented student in less than a minute. It takes me longer than a minute to identify an excellent company as a future profitable investment. With this review in place I now have several excellent metals and mining companies on my longer-term buy list.

Currently, these companies all look very similar and that is negative. However, there are excellent indications that stock prices will bottom and be on the rise again. Definitely, I will review my list of metals and mining companies again in a few weeks.

Conclusion

I am bearish on both the economy and the general market. My recent postings in Instablog are focused on securities that should not be held in your portfolio. It is important for you to understand that holding cash during questionable time frames is a wise choice. (This is definitely a 'Questionable' time frame). This coming Saturday, AA will be included in my weekly Instablog posting.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Report Card: Alcoa And Selected Peers