It would be a tall order to find a mining and metals company that has experienced a tougher two years than Alcoa
The question then becomes whether the venerable Pittsburgh company has become a buy. Certainly, if activity is a measuring stick, the response could be positive. Today, for instance, Alcoa announced the acquisition of privately held Traco, which manufactures premier windows and doors for sale globally. Once the acquisition is completed, Traco will become part of Alcoa's Building and Construction Systems business.
At the same time, the company is forking over $1.5 billion for the construction of a low-cost bauxite mine in an ultraremote area of the Amazon jungle. Bauxite is critical to aluminum manufacturing. Alcoa aims to move into the same league with lower-cost competitors like Rio Tinto
Alcoa has furloughed 60,000 employees on its way to shaving $3 billion in operating costs. Beyond that, the company is spending $2.2 billion to become a partner with Saudi Arabian interests in a new aluminum mining project that will become the kingdom's largest. To spread the wealth across the globe, Alcoa has spent about $750 million in Russia during the past few years, modernizing plants to better serve the country's food, beverage, and aerospace industries.
But perhaps the biggest long-term benefit to the company will be China's recent decision to permit its yuan to rise freely against the dollar. That step could increase demand in China, while simultaneously benefiting companies such as Caterpillar
Now, with earnings season around the corner, and with aluminum manufacturers such as Alcoa and smaller rival Century Aluminum
