Why Alcoa Is Poised to Bounce Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, aluminum giant Alcoa (NYSE: AA  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Alcoa and see what CAPS investors are saying about the stock right now.

Alcoa facts

   

Headquarters (founded)

New York, N.Y. (1888)

Market Cap

$8.6 billion

Industry

Aluminum

Trailing-12-Month Revenue

$23.5 billion

Management

Chairman/CEO Dr. Klaus-Christian Kleinfeld

CFO Charles McLane Jr.

Return on Equity (average, past 3 years)

3.3%

Cash/Debt

$1.6 billion/$8.9 billion

Dividend Yield

1.5%

Competitors

Aluminum Corp. of China

Rio Tinto

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 93% of the 3,673 members who have rated Alcoa believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, kahunacfa, succinctly summed up the Alcoa bull case for our community:

This economically sensitive and highly cyclical company has been languishing in the current stock market. As the US economy continues to slowly recover from the deepest recession since the nineteen-thirties, some of the excess aluminum production capacity is slowly being absorbed by the slow growing world economies. Given the prospects for growing world economies from 2013 through 2015 or even 2016 Alcoa's earnings prospects continue to improve through-out this period over the next three to perhaps as long as five years.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant, simply click here now to get started.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.


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