Alcoa (AA) Returns to the BUY Consideration List!

Comments:  Alcoa, Inc. is a company engaging in lightweight metals engineering and manufacturing. Their multi-material products, include aluminum, titanium, and nickel, which are used worldwide in aircraft, automobiles, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial applications. Alcoa produces and manages primary aluminum, fabricated aluminum, and alumina combined, through its participation in major aspects of the industry: technology, mining, refining, smelting, fabricating, and recycling. Alcoa, Inc. was founded in 1886 and is headquartered in New York City.

Alcoa suffered in terms of stock pricing from mid-2014 until January 2016 falling from $17.43/share to $6.89/share. You can see in the chart below the stock was well below Fair Value (FV) in January 2016. Currently, the share price represents 78.9% FV. The stock price is very much driven by global economic GDP forecasts. We believe the probability for the same, or slightly higher GDP levels globally is increasing.

CAUTION: If the vote on BREXIT on June 23rd is to leave the European Union, Alcoa will receive downward pressure for the short term, but recover as emotional fears dissipate. Alternatively, if the vote is to remain part of the E.U. stocks like Alcoa will benefit.

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