Just because a company is a leader in its given industry doesn't mean that it's immune to challenges. Lately, aluminum company Alcoa (NYSE:AA) has had to learn this the hard way. Its stock price has sunk recently upon word that Moody's lowered its rating to "junk".
While Moody's admitted that Alcoa has been boosting its productivity and cutting costs, it cited macroeconomic factors like the recession in Europe and slow growth in China as strong reasons for the downgrade. However, there are other cracks in Alcoa's financial structure that might make a would-be long-term investor wary. In the video below, Motley Fool contributor Caroline Bennett looks at some additional reasons to stay away from Alcoa, at least for now.
Fool contributor Caroline Bennett has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.