Alumina Limited (ADR)
There has been a rapid increase in primary aluminum production capacity globally and lower aluminum prices have hurt companies’ sales.
According to the latest survey by MetalMiner, “a fair amount of bearishness and skepticism appears to prevail in the general mood as far as a 2014 aluminum forecast is concerned”. Recent production cuts should support a move higher, but it is unclear if they are going to be enough more »
The Aluminum Company of America, or Alcoa (NYSE: AA), has not been receiving much love from investors lately. This is understandable, as the shares have fallen over 16% in the last 12 months. Alcoa shares are trading at the same levels now as in April 2009. Recent underperformance has made betting against the firm popular on Wall Street--more than 8% of outstanding float is being shorted, by more »
The aluminum industry has been going through a “prisoner’s dilemma” just like the US steel industry. Industry output has exceeded demand and therefore margins have been squeezed due to massive price cuts. Not a single player is willing to take the first step of reducing its production capacity. This has led to unfavorable returns for aluminum investors:
Noranda Aluminum (NYSE: NOR)
Noranda’s sales volumes are expected to improve more »
Certain base metal players are likely to report their earnings in the next three weeks or so. It is not a coincidence that all of them are Australian companies. An earnings preview of the base metal players not only gives us a unique opportunity to make money on an important catalyst, but also gives us a flavor of direction and trends of commodity prices.
Alumina (NYSE: AWC)
Alumina Limited is more »
Basic materials can be highly unpredictable. Prices rise and fall overnight. Companies collapse to pressure. Others are cornered out of the market. And some manage to generate attractive returns to shareholders through appropriately managing production to optimally meet demand. In the end, the tail of basic materials is largely a tail of managing risks. Below, I review three aluminum producers to consider buying.
Given how volatile basic materials are, investors should look to the macroeconomy for guidance. If you believe that the economy will hit full employment quicker than what the market forecasts (like I do), consider buying now. If you believe that the economy will be worse than forecasts, consider selling. In the former case, while diversification is always good - there are some stocks that are simply too risky for the limited more »
Diversification is the best defense against global uncertainty. Living abroad, that is one truth that I have come to appreciate more and more. With so much uncertainty in Europe and the rest of the world, we sometimes forget that truth. In these times of uncertainty, many investors seek the safety of good US companies, avoiding the rest of the world completely. Diversification means more than just different sectors of the US economy. Diversification also means foreign companies that will protect your portfolio from domestic risk.