Boston, MA 01/22/2014 (wallstreetpr) – Alcoa Inc (NYSE:AA) has been noticed rising nicely even as everybody knows that the situation has not improved in the aluminum market. It thus means that this rise needs to be looked at closely to reveal what is fueling it, and better yet, if investors can benefit from the ongoing rise of the stock.
While Alcoa doesn’t make it yet to the cut of the high-flying stocks, many investors are yet to realize the strength in this stock and this means that equally many investors are at risk of missing money opportunity in Alcoa Inc (NYSE:AA).
The rise of Alcoa stock reveals hidden strength and serves some irony. That the stock is up more than 48 percent since bottoming at $7.70 in August suggests a lot of hidden strength. And the fact that the stock has gained about 36 percent since its ouster from Dow Jones Industrial Average serves the irony bit of the stock’s rise. So then, what is powering the stock?
Factors fueling the stock rise
The noted rise in the stock of Alcoa Inc (NYSE:AA) is indication of the underlying opportunities. As the aluminum market remains under pressure, Alcoa has been selling assets and shutting down non-competitive plants in order to stem financial losses. In so doing, the company has managed to win over investor confidence that the future is going to be bright.
Beside consolidation and plant shutdowns, the company has recently turned focus to value-add aluminum materials suitable for aerospace and automotive manufacturing. Therefore, the company is poised to benefit from the increasing modernized jetliner orders placed by Airbus Group and The Boeing Company (NYSE:BA). And on the automotive sides, Ford Motor Company (NYSE:F) is leading the adoption of aluminum for truck body manufacturing. Increasing usage of aluminum in auto manufacturing industry is expected increase the demand for light-weight and high-strength aluminum which is an area that Alcoa Inc (NYSE:AA) thrives.
Bottom line
Alcoa Inc (NYSE:AA) hopes that more and more automakers will seize the opportunity of using its aluminum alloys which help reduce vehicle weight by up to 700 pounds. Vehicle weight reduction also helps automakers to comply with the environmental laws which advocate for fuel efficiency.
