Is Alcoa Inc (NYSE:AA) Oversold?
Alcoa Inc (NYSE:AA) has been entangled in a year-long battle with North Carolina officials, over the control of the electricity and water that comes from the 2nd largest river system in the state. On Wednesday, the company protested and took on an aggressive stand for its rights. In the court filings, Alcoa Inc (NYSE:AA) said that it should be provided with the water-quality certification it requires for the federal operating-license that will be valid for the next fifty years.
In a lawsuit that was filed in August, state officials said that the company did not have ownership right to the Yadkin River bed. This river has 4 dams that had been built over the last 100 years. The lawsuit seeks that the Federal
Judge rule that the state has ownership of the riverbed as it became a state post the American Revolution. Also, now the North Carolina state owns interest in the company’s 4 hydro-power dams.
River bed rights issue
In its response to the lawsuit, Alcoa Inc (NYSE:AA) said that even if the state did have ownership rights over the river bed, those have been forfeited since they were never claimed till date. Apart from this, the company also appealed the water certification that had been rejected, in a state-administrative court. They are saying that unfair treatment has been meted out to them and that the state environmental agency was all set to approve it until this riverbed lawsuit emerged.
Standards not met?
North Carolina’s Division of Water Resources denied the company’s water certification bid saying that it doesn’t meet water-quality standards. It is mandatory for Alcoa Inc (NYSE:AA). To gain that certification before the FERC issues a new multi year license. E. Ray Barham, Alcoa Inc (NYSE:AA)’s relicensing manager said that the state’s water agency should have restricted this to the water-quality issue instead of bringing the riverbed ownership issue into the picture.
Currently stock of Alcoa Inc (NYSE:AA) is moving sideways without any decisive movement in its share price. The 14-Day RSI of the stock stands at 46.15 which signify that the stock is still a buy. Stock is trading above its 20-Day EMA which stands at $8.19.