Aluminum is essential to an industrial recovery
This morning I added Alumina Ltd. (AWC) to the Barchart Van Meerten Speculative portfolio. AWC's principal activities are mining, processing and marketing of minerals, metals, fertilizers, exploration for minerals, and investments in companies producing metals, minerals and chemicals.
They are a fully integrated company from the mining of bauxite at 8 different mines, to smelting and refining of the aluminum at 8 different refineries and smelters to actually shipping to the ultimate user. They are responsible of 17% of the world's total production of aluminum with over 7,000 employees scattered over Australia, the US, Guinea, Suriname, Jamaica, Brasil and Spain. As the economy recovers there should be a great need for aluminum.
The stock has recent and very positive price momentum. Barchart has a 96% buy signal based on buys on 12 of it's 13 technical indicators. The stock rose 17.08% last month with 11 new highs in the last 20 trading sessions. The Relative Strength Index is 63.75% and rising. The recent price of 6.52 is well above it's 50 day moving average of 5.72%.
Wall Street has yet to discover this stock but the only analyst following the stock has a buy recommendation published based on his estimate that sales will rise 16.70% next year. He also forecasts a 163.60% increase in EPS this year and a 5 year annual compounded EPS growth of 15.80% .
Even though Wall Street hasn't discovered this stock the general investing public has. On Motley Fool the CAPS members vote 240 to 10 that the stock will beat the market and the All Stars agree 104 to 3.
I like AWC because:
1 - They have a product - aluminum - that the world needs
2 - With 17% of the world production they are no small player
3 - Recent price momentum means it's the time to buy
4 - There is a pretty wide and positive investor following Wall Street is just starting to discover their fundamentals
Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: No positions in the stock mentioned at the time of publication