Aluminum Corp. of China Limited (ADR) (NYSE:ACH)

CAPS Rating: 4 out of 5

A joint stock limited company, with its subsidiaries is engaged in bauxite mining, alumina refining and aluminum smelting. Principal products are alumina and primary aluminum.

Recs

5
Player Avatar TheGarcipian (62.61) Submitted: 6/21/2007 2:29:11 AM : Outperform Start Price: $40.86 ACH Score: -106.53

The Upside -- the numbers look good to me: PEG=0.89, Forward P/E=16.55 (a bit high for an alumina producing company; Kaiser Alum's is 14.45), Price/Sales & Price/Book both under 1.0 (meaning there's more Book Value than Share Value? Why hasn't the rest of the market seen at least this $9/shr difference?!), and excellent quarterly sales & earnings growth (72.7% & 44.2%, respectively).

The Risks: Can we really believe the growth rates attributed to China by our never-flagellated-enough anal-ysts? Probably not. But given the growth rate of its past and the momentum behind this stock (look at that 5-year chart!), even if half of the growth rate is true, this stock should continue to beat out the S&P 500. The other downside risk is the influence of the Chinese government. However, even that risk is mitigated in that they realize they need raw materials and processed alumina product to grow their military, if not the rest of their country.

Thanks to yippiekiyeh for pointing this one out to me.

Report this Post 8 Replies
Member Avatar mardukkorn (74.93) Submitted: 7/4/2007 11:38:37 AM
Recs: 0

p/b Is >1 i think yahoo finance has the numbers wrong.

Member Avatar hhasia (65.89) Submitted: 7/23/2007 1:50:20 PM
Recs: 1

A better source for information is the Hong Kong exchange web site: This STOCK CODE 2600.
In fact this site is good for most of the major ADR's from Hong Kong. While the prices are different the trends are the same: Plus the HK$ is pegged to the US$.
http://www.hkex.com.hk

Member Avatar smh4s (< 20) Submitted: 10/13/2007 3:30:33 PM
Recs: 0

Hard to add shares at these prices. But if you like China and are bullish on metal stocks there is CPSL that could move up significantly. CPSL is small and overlooked by the ADR players.

Member Avatar TheGarcipian (62.61) Submitted: 10/16/2007 2:35:32 PM
Recs: 0

Thanks, smh4s. I'll check out CPSL.

Member Avatar AJAQ007 (21.37) Submitted: 12/19/2007 10:25:42 AM
Recs: 0

In just over a year, This stock has climbed from 17 to what it is now.

Not a bad return, eh?

Member Avatar TheGarcipian (62.61) Submitted: 12/21/2007 1:59:10 AM
Recs: 0

Yes, not a bad return at all. I only wished I'd invested in it sooner! True, it has fallen from its high of $90 on 10/17/2007 down to about $50 today, but I'm hoping this is just a settling phase and that the downward trend stops in a few more weeks. I could use some positive moves in my stocks! (Couldn't we all?)

Member Avatar TheGarcipian (62.61) Submitted: 12/21/2007 2:05:19 AM
Recs: 1

Yes, not a bad return at all. True, it's fallen a bit from its high of $90/share on 10/17/2007 to about $50/share now, but I'm hoping this is just a cooling phase, letting the company catch up to its stock price. The downward trend hasn't stopped, but it has slowed. I'm hoping that in the next few weeks we'll see a course reversal. I could sure use some positive moves in my real-world purchases! But then, can't we all?

Member Avatar TheGarcipian (62.61) Submitted: 5/22/2008 10:01:47 PM
Recs: 1

Looking at the chart for ACH, it appears to me that the stock price has settled down, finally. Currently, its PEG ratio is 1.02, which causes me to think it will start moving up presently. Indeed, since mid-March, ACH has not hit any newer Lows, and its localized Highs have been getting ever so slightly higher with each passing month. I'm still not crazy over the fact that their quarterly Revenue and Earnings growth are both (still) negative, but hopefully that will get straightened out this quarter. I'm also not happy with its Debt/Equity ratio of 43.8%, but I suppose some of that is to be expected in this capital-intensive business. Best news so far is that the stock currently sits below its Book Value. Couple that with a PEG of about 1.0, and I think you've got a good buying opportunity for this stock right now.

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