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4-Star Stocks Poised to Pop: Alcoa

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's business and see what CAPS investors are saying about the stock right now.

Alcoa facts

Headquarters (Founded) New York (1888)
Market Cap $11.5 billion
Industry Aluminum
Trailing-12-Month Revenue $24.6 billion
Management CEO Dr. Klaus-Christian Kleinfeld (since 2008)
CFO Charles McLane, Jr. (since 2007)
Return on Equity (Average, Past 3 Years) (1%)
Cash/Debt $1.34 billion / $9.31 billion
Dividend Yield 1.1%
Competitors

BHP Billiton (NYSE: BHP  )

Rio Tinto (NYSE: RIO  )

Vale (NYSE: VALE  )

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

On CAPS, 94% of the 3,463 members who have rated Alcoa believe the stock will outperform the S&P 500 going forward. These bulls include piranha60565 and dougherty7.

Late in September, piranha60565 tapped the stock as a solid turnaround opportunity: "Aluminum is making a comeback and [Alcoa] will benefit the most. Competition in China is tough but I trust their management and experience."

Over the next five years, in fact, Alcoa is expected to grow its bottom line at a brisk rate of 37% annually. That's much faster than competitors like BHP (16%), Rio Tinto (9%), and Vale (7%).

CAPS member dougherty7 expands on the big trend working in Alcoa's favor:

I expect aluminum to become increasingly important to automakers. Fuel economy regulations are set to ramp up aggressively over the next 10-20 years. When tweaking the engine leaves a car short of the industry requirement, the automaker will have no choice but to save weight. Aluminum's strength and lightness will make it a crucial part of every car.

What do you think about Alcoa, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to track Alcoa? Add it to your watchlist.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (7) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 01, 2011, at 11:31 AM, havvey wrote:

    Good investment but not a rocket stock

  • Report this Comment On November 02, 2011, at 12:51 PM, Brettze wrote:

    China has to shut down most of its antiquated inefficient polluting aluminium smelters. China produce close to half of the world's aluminium annually which is way to omuch... China helped copper prices zoom by importing a lot of copper from Chile . Same can be true for aluminium , but Americans rushed to sell coal to China to help China generate enough electricity to power its sprawling aluminium smelting operations of close to 20 millon tons annually against the world production of 40 millon tons annually. Also, American industrial users like GE, Boeing, GM & Ford , Coca Cola, want to maintain cheap aluminium prices to bolster their bottom lines as well as their pension plans.. High copper prices brought down our real estate industry as it becomes far less profitable to keep building ... I am not asking for $ 4 aluminium but $3 aluminium is about appropriate and long overdue.. Copper miners got swallowed all the way to Freeport McMoran which already has Phelps Dodge, Cyprus Amax to name a few others under its arms.. ALCOA is the only big aluminium producer left except for Century Aluminium and Noranda Aluminium in America. Aluminium prices are still greatly depressed at $1 and the producers will accept a tiny hamburger for a pound of aluminium which is really gross stupid!

  • Report this Comment On November 02, 2011, at 12:57 PM, Brettze wrote:

    Aluminium prices is maintained so low as if we are waiting for certain people like myself to stat throwoing in the towel and give up on ALCOA, then boom! aluminium prices suddenly take off.. it had been decades since aluminium crossed $1 a pound for the first time and yet it never managed to cross $2 a pound since then.. This is price fixing on a grand scale so big that you cannot see the forest for the trees.. so it is so hard to argue about that ridiculously low price still fetching for aluminium. Hey, it is coming down again lately.. What is goin g on?? Copper prices still stay high for years and appears to be staying that way .. Aluminium prices are pure politics lately a big lie !!

  • Report this Comment On November 02, 2011, at 1:02 PM, Brettze wrote:

    American industrila heavyweights are carefully orchestrating the prices of aluminium and this is the reason why speculators are starting to hoard aluminium in secret warehouses run by Goldman Sachs and the likes in effort to bolster aluminmium prices as much as possible.. There is supposed to be increased demand for aluminium coming from the solar energy industry for solar thermal applicatoins but they are apparently delayed to keep the demand down and prices down for aluminium for the benefits of GE, Boeing, Coca Cola , Pepsi, GM , Ford etc.. ALCOA can sing all day about how bright the future is for aluminium but it never mention the bright future for aluminium prices going thorough the roof as supposedly.. ALCOA shareholders are wasting their times watching ALCOA stock price as longas aluminim prices is fixed for political reasons... There is nothing to do with supply and demand.. China are trading horses with America by being willing to maintain its vast aluminium operations in return for higher copper prices... Free market, ?? hahahah! no ...

  • Report this Comment On November 02, 2011, at 1:07 PM, Brettze wrote:

    Solar thermal devices ought to be developed and marketed by now .. Aluminium will be a critical metal in solar thermal products ... Our solar energy industry is obesessed with generating electricty or kilowatts with silicon based photovoltaics.. Aluminium is not going to be used to generate electricity but it is going to be used to reflect sunlight and concentrate sunlight iinto powerful hot applicatoins that we use to rely on natural gas for processing . There is so many applicatoins that can be switched to solar energy using aluminium concentrators... We havent begun to do that becaues General Electric, Boeing, Coca Cola and GM and Ford dont want to see increased demand and competition for the finite supplies of alumninmium with most of it still hidden in secret warehouses by determined speculators knowing that aluminiujm prices are artificially depressed by the industrila heavyweights who dont care about our energy supplies... They dont care about energy independence.. they only care about their arrogrant shareholders and earnings to the hilt.. We have no choice but to stop them from maniupulating the aluminium market.. Let anyone have access to aluminium and make great energy independent products and to heck with General Electric and its henchidiots!

  • Report this Comment On November 02, 2011, at 1:10 PM, Brettze wrote:

    A pound of aluminium is three times as big as a pound of steel.. so this si why aluminum prices is so undervalued too grossly cheap to allow ALCOA to make money at all. ALCOA had been quietly selling off assets and diluting shares to keep their earnings look good at $1 a pound which is not sustainable.. ALCOA IS NOT A SUSTAINABLY PROFITABLE COMPANY UNITL ALUMIIUM PRICES GO UP TO $3 A POUND FIRST.. ALCOA SHAREHOLDERS TAKE HEED.. SELL ALCOA OR YOU WILL REGRET IT.. YOU CAN ALSO CALL INVESTOR RELATIONS AT ALCOA TO ASK THEM WHY THEY KEEP DOING IT AT $1 A POUND WHICH IS WAY TOO POINTLESS TO KEEP GOING. IF AT ALL..IT IS POINTLESS !!

  • Report this Comment On November 02, 2011, at 1:11 PM, Brettze wrote:

    i DONT CARE ABOUT THE SHAPE OF OUR ECONOMY WE HAVE .. ALUMINIUM PRICES CAN GO UP NO MATTER WHAT... COPPER PRICES HASNT COME DOWN ATALL .. NICKEL, MOL.Y, TIN, SILVER, GOLD, ETC HASNT COME DOWN AT ALL ALUMINIUM HASNT EVEN GONE UP ONE PENNY AT ALL. THIS IS POLITICS! DIRTY!

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Brian Pacampara
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I take a look at big 10% moves, as well as stock-shaking analyst calls, on a daily basis for The Fool. While I don't believe in active trading, closely monitoring Mr. Market's mood swings can help identify long-term opportunities.

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