Will Alcoa Inc (NYSE:AA)’s Aluminum shine again?
It’s not really nice to see a company like Alcoa Inc (NYSE:AA) down in the dumps. The general feeling was that Aluminum will bounce back and so will Alcoa, but it seems to be glued to its depressed level. The Aluminum giant is down to $8.7 but what is even worse is the fact that the negative outlook doesn’t really seem like it’s going to recede. If there eventually is an upswing in the global economy, AA might just have the chance to return to its days of glory. A rise in aluminum prices would hopefully see some relief rally in the Alcoa stock. However, it’s not really possible to take any position the stock till the fog lifts a little.
Very recently, Alcoa had a conference call. This was an indication that it now recovering a bit, managing its expenses and generating slightly better revenue. But there is no evidence of growth. At the first sign of some recovery in aluminum prices, Alcoa would be the first company that an investor should take a position in. Despite all odds, the company has managed to hold its own. The metal environment just looks bleaker with every passing day but AA is not saddled with excessive debt.
It also has a sufficient amount of cash on its balance sheet to fuel its forward movement. Alcoa truly needs to use this time to its benefit. It has been making a tremendous cost-cutting effort whenever and wherever possible. When the weather changes, Alcoa will surely be ready. Any market watcher will tell you that it’s a company worth waiting on, but if its price drops, just grab it.
At the moment, AA seems to have lost its sheen but things seem to be on the mend. The global financial downturn has left the best of companies and the strongest market pillars, shaken. There is sure to be a rise in interest rates and a new boom will be unleashed. That’s what a hardcore Aluminum investor will look forward to.