Source: Alcoa.

Aluminum giant Alcoa's (NYSE:AA) fall from grace stunned many investors, with the industrial stalwart falling out of the Dow Jones Industrials after the end of the global commodity boom led to a dramatic collapse in its share price. Since then, however, Alcoa has put in a strong performance, and appears to be positioning itself for a recovery in the long-suffering aluminum market. In particular, a few positive signs from Alcoa in the past few months have set the stage for what could be another push higher to the stock's best levels since before the financial crisis. Let's look at three of those factors and how they could send Alcoa to new highs for 2014.

1. New projects are sending Alcoa beyond its aluminum base.

Alcoa once stood for Aluminum Company of America, and making aluminum was Alcoa's primary business. But recently, Alcoa has recognized the value in diversifying into other specialty metals and materials in order to be a one-stop shop for customers looking to meet all of their needs.

Control room at Indiana aluminum-lithium plant. Source: Alcoa.

Specifically, Alcoa's new aerospace plant in Indiana opened its doors in early October. The plant will help Alcoa meet the demand for special lightweight aluminum-lithium alloys. Lithium is an even lighter material than aluminum, yet when you combine the two, the result is a strong alloy that's less expensive than titanium or composite materials but still provides many of the benefits of lighter-weight materials, such as increased fuel efficiency. As CEO Klaus Kleinfeld noted when the plant opened, "The future of aviation is being built with aluminum-lithium, and Alcoa is making big moves to capture that demand." With Alcoa already holding contracts for $100 million in aluminum-lithium sales by 2017, the company clearly sees a bright future for the material. Moreover, by reaping tax breaks and other incentives, Alcoa gets a positive reputation in the communities it serves.

2. Alcoa is working hard to minimize its costs.

Alcoa has different divisions focusing on various parts of the aluminum market. Although the value-add segment has received the lion's share of investor attention, one of the most remarkable things about Alcoa's comeback is how much progress it has made in being more competitive even at the raw-commodity level. The secret to Alcoa's success has been to find the lowest-cost sources of raw materials with which to make commodity aluminum products.

Mt. Holly facility. Source: Alcoa.

In many cases, Alcoa has had to divest itself of higher-cost facilities already in its portfolio. For instance, late last month, Alcoa sold its majority stake in the Mt. Holly aluminum smelter in South Carolina to Century Aluminum, which was its partner in the joint venture. Although the facility has the capacity to produce almost 230,000 metric tons of aluminum every year, Alcoa divisional president Bob Wilt noted that "its cost structure doesn't match Alcoa's criteria for a low-cost portfolio of upstream assets." The sale includes earn-out provisions that will give Alcoa a profit interest into the future, but, more important, keeping costs down will help improve margins in the rest of Alcoa's upstream division.

3. Alcoa's transformation continues to make progress.

Both of the events mentioned above are part of a wider effort by Alcoa to transform its business. Last week, Alcoa made a presentation on its Investor Day to sum up the progress it has made.

Rolled-aluminum products. Source: Alcoa.

In particular, Kleinfeld highlighted not only the value-add businesses that have brought in greater revenue, but also the improvements in productivity and cost-effectiveness that have helped Alcoa meet or exceed its financial targets for the year. In the upstream segment, Alcoa has made considerable progress in moving down the global cost curve and becoming more competitive. But investments in its midstream global-rolled products business, both in the U.S. and in overseas areas like Brazil, are helping Alcoa focus more on the higher-margin opportunities in that business. With overall demand for aluminum as well as strong conditions in the industries that require the greatest amount of value-add capacity, Alcoa expects that the key drivers of its overall growth should continue well into the future.

After an impressive run that doubled the stock from its year-end close in 2013, Alcoa's recent correction hasn't come as a huge surprise. Nevertheless, with so many favorable factors going its way, Alcoa is likely to get back its upward share-price momentum sooner rather than later.