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

Industry (192 industry groups) – Buy strong stocks on pullbacks in strong industries

ACH is part of the Metal Producers – Pipe / Fab / Misc industry group. This industry group has been in the top 10 industry groups for only 1 time over the past 52 weeks (week ending May 11, 2007). Currently, the industry group is ranked #23. Amazingly the industry actually stays in the top 40 industry groups consistently (top 20%); however, it just can’t break into the top 10. When you break into the top 10 industries it means a lot of powerful Wall Street money is backing your industry group. It is very bullish once you hit the top 10 multiple times. Will the next few weeks prove to finally be the breakout into the top 10?

ACH is the largest market cap stock in this industry group. It is followed in market cap by PCP and GNA. PCP is a stock I would consider buying on a strong pullback.

Fools – Top 100 fools outperform the rest of the pack

This is amazing. 32 of the top 100 fools’ green thumb this stock and 2 top 100 fools red thumb it. Although this is only my second week doing my daily pick, this level of scrutiny by the best performing fools blows away all my previous picks. However, we need to look at the second indicator. In the last 90 days 6 top 100 fools green thumbed vs. 1 red thumb. In other words, this wasn’t a bad pick that top 100 fools got trapped in and refuse to close, but still more top 100 fools are piling in at the discounted price. This is very bullish.

Technical – In a bear market buy the best companies most oversold, in a bull market buy strong stocks on pullbacks

ACH is about 57% off its 52 week high which I get concerned about. In a bear market I prefer a 25% to 35% pullback from the 52 week; this concerns me that there is more to this drop. If it weren’t for the high level of top 100 fools this could be a deal killer for me. There is significant support at 35 a share and the stock now sits at 40 a share. The stock seems to be trending sideways and could be consolidating for another move up. However, this is a 5 year hold so technical’s has its place, but fundamentals are more important. I find the chart slightly bullish

Sales / Earnings Growth – If it isn’t growing then neither is your portfolio

Normally I have a write up for this section, but I find it disturbing that different media sources have significantly different growth rates on this stock…. I hate the Chinese

Fundamentals – Its fun to be mental. However, it is more fun to make money doing quality research

Again, normally on my daily picks I have a write up on the stock, but again I can’t find any financial statements or 10Qs, 10Ks to review. I really don’t like the idea of investing in a stock where I can’t review financials in a timely manner… have I mentioned I hate the Chinese? In any event, this is a high risk stock… remember…. This is China you are talking about…