Please ensure Javascript is enabled for purposes of website accessibility

Why Century Aluminum Co Plunged 17% Today

By Travis Hoium – Feb 23, 2016 at 2:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A Wall Street analyst hit this aluminum manufacturer today.

What: Shares of Century Aluminum Co (CENX -18.27%) dropped as much as 17% on Tuesday after being downgraded by an analyst.

So what: BMO Capital analyst David Gagliano downgraded the stock to market perform from an outperform rating and slapped a $6 per share price target on the stock. The analyst did note that the company could continue to rally if aluminum prices rise, but felt that after the recent bounce the stock was fairly valued. 

Now what: The volatile week for Century Aluminum continues and this is why investors should be wary of speculating on a company that's losing money. Even bullish predictions are only that the company will turn a corner from burning cash to being slightly better than breakeven sometime early in 2016. But even then the price of aluminum could derail that prediction. In my eyes, this industry is too risky to bet on right now and until there's fundamental improvement in both supply and demand, investors will just be speculating on where the bottom is.

Travis Hoium 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Century Aluminum Company Stock Quote
Century Aluminum Company
$5.28 (-18.27%) $-1.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.