Alcoa and Century Aluminum Benefit From Aluminum's Greater Exposure
November 04 2011 - 8:16AM
Marketwired
Aluminum prices are at a low right now as investors worry about a
weak U.S. economy and a possible European recession negatively
affecting the global industry. With aluminum being used in many
different industries across the market, weak aluminum prices could
reflect broader economic troubles ahead. The Paragon Report
examines investing opportunities in the Aluminum industry and
provides equity research on Alcoa, Inc. (NYSE: AA) and Century
Aluminum Co. (NASDAQ: CENX). Access to the full company reports can
be found at:
www.paragonreport.com/AA
www.paragonreport.com/CENX
Aluminum prices have fallen approximately 10 percent this year
amid concerns that the global economic slowdown may cut demand for
raw materials. While that number may be alarming, ten percent is
the smallest drop among the six industrial metals traded on the
London Metal Exchange.
Aluminum has been taking on a bigger role in electronics
products as designers have started to use more environmentally
friendly materials. Industry experts explain that the metal is
easily recycled with no loss in quality. Moreover, the push by
automotive and aerospace companies to create lighter and
consequently more fuel efficient vehicles has also helped to
bolster demand for lightweight aluminum. Alcoa spokesman Kevin
Lowery said Aluminum's density is one-third that of steel.
The Paragon Report provides investors with an excellent first
step in their due diligence by providing daily trading ideas, and
consolidating the public information available on them. For more
investment research on the aluminum industry register with us free
at www.paragonreport.com and get exclusive access to our numerous
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Alcoa announced that third quarter net income rose to $172
million, or 15 cents a share, from $61 million, or 6 cents, a year
earlier. Sales increased 21 percent to $6.4 billion, beating the
$6.23 average of nine analyst estimates. Chairman and Chief
Executive Klaus Kleinfeld said he sees stable prices in the near
future for the raw materials used in making aluminum. Kleinfeld is
blaming falling aluminum prices on negative bets from the financial
industry.
Century Aluminum reported a net loss of $6.6 million ($0.07 per
basic and diluted share) for the third quarter of 2011. Financial
results were positively impacted by a mark-to-market gain on
forward contracts of $4.2 million related primarily to aluminum put
options. Cost of sales for the quarter included a $13.5 million
charge for lower of cost or market inventory adjustments.
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