The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics across the investing world.
Over the next couple of weeks, John and David will be revisiting some calls they made on individual stocks of the Dow. Today, they're checking out Alcoa. This company is down around about 4% in 2012 compared with just a 5% or so gain for the Dow average as a whole. Alcoa is also somewhat tied to the global economy, which hasn't been great. John and David gave Alcoa an outperform versus the market, and so far the market is winning. The company is a leading aluminum producer, but falling prices have really put pressure on it and competitors like BHP Billiton and Rio Tinto. Alcoa continues to find ways to be more productive, but it's a tough job. And as companies like General Electric and Boeing start to do more design with ceramics and carbon fiber, there could be demand pressure coming in the future. It's a tough call. Even well-run companies can suffer in cyclical industries. John and David now think that this one might be an "underperform" going forward.
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