Historically, tumultuous times offer some of the best opportunities to buy stocks, and the market's recent mess surely qualifies. The various commodities sectors have been hammered lately, but many investors think stock in aluminum producer Alcoa
In our Motley Fool CAPS community, nearly 93% of the 2,670 investors rating the company are bullish, so there's no shortage of reasons why Alcoa will thrive, three of which I've highlighted below.
But here at The Motley Fool, we're all for looking at both the good and bad sides of an investment, so in this article, I've highlighted three arguments for owning Alcoa today. Then you can read the cons and even weigh in with your own comments below -- or rate Alcoa yourself in CAPS.
Rising domestic demand: The Aluminum Association recently reported a rise in North American aluminum demand for June and noted that U.S. and Canadian producer inventories were down 5.1%. Alcoa also recently said it expects the company to benefit from the popular but often maligned Cash for Clunkers program. Ford
(NYSE:F)and Toyota (NYSE:TM)have announced that they'll revamp production in the second half of this year, a move that should also benefit steel companies like AK Steel (NYSE:AKS)and ArcelorMittal (NYSE:MT).
Improving macro conditions: Many CAPS members believe the worst is behind Alcoa. Recent results from Nucor
(NYSE:NUE)and U.S. Steel (NYSE:X)have some investors calling a bottom in steel. And as aluminum prices have been on the rise many CAPS members anticipate better days ahead for the aluminum stalwart.
- Aluminum -- the new oxygen: Alcoa's aluminum products can be found all over and have been integral components of many industries for over a century. Although the company has been dazed by the recession, many CAPS members point out that it's often the metal of choice in applications and expect it to be the leading provider of aluminum as the economy improves and more manufacturers embrace the lightweight metal's use going forward.
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Fool contributor Dave Mock is still happily holding onto his "clunker." He owns no shares of companies mentioned here. The Fool's disclosure policy actually orchestrated the "leaked" photos of its romantic beach encounter to the tabloids.