Alcoa shakes off earnings miss, powers to 12% pickup this week

|By:, SA News Editor

Alcoa (AA) a high flier? So it seems: Just one week after a dismal Q4 earnings report dragged AA to the bottom of the S&P 500, investors decided it wasn't so bad and have sent shares climbing more than 12%.

Shares have jumped nearly 50% since hitting a low close of $7.70 on Aug. 30 and have even gained 35% since they were yanked from the Dow on Sept. 20.

24/7's Charley Blaine cites three main reasons: AA is cutting capacity in its primary smelting business where it is no longer competitive; the auto industry is moving to aluminum in a big way; and the booming airline industry is craving AA's light but strong aluminum alloys.

Even Jim Cramer is now on board, saying that an improving global economy means that when inventories are finally worked off and new, lower-cost facilities are in place, "the amount of money that will be made off of a slight increase in sales could be shocking."