Best Stocks for 2012 Aluminum stock Alcoa (NYSE:AA) announced this week that it will be taking a significant one-time charge from moves to cut smelting capacity. In the short term, this might seem like trouble — with Alcoa stock down more than 2% at the open Friday — but buy-and-hold investors might want to buy in on this dip.
AA stock has seen better days, to be sure. Shares are off about 70% from early 2008 and down about 40% in the past year. But the fact is Alcoa fundamentals are improving, in large part because of restructuring moves like this one that provide short-term pain but make the aluminum giant much more competitive in the long run. Alcoa remains my pick for one of the 10 best investments to buy and hold for all of 2012.
Here are the specifics of the recent charges: Alcoa will write off 15 to 16 cents per share in its fourth-quarter results thanks to moves that cut about 12% of its global smelting capacity. It will permanently close a smelter in Tennessee, along with two of six idled potlines at a Texas facility. Further curtailments will be announced “in the near future,” the company said.
Why would cutting back capacity be a good thing? Well, for one, demand is weaker after the financial crisis. Durable goods and construction products using aluminum just aren’t selling as fast as they used to. But another important reason is that aluminum prices are very soft, off about 27% from peak levels in 2011, and slashing supply will provide a floor for the price of Alcoa’s aluminum that it provides to manufacturers.
True, Best Stock to buy for 2012 Alcoa isn’t sexy. It’s a stodgy Dow Jones component that is hardly a 21st century company like Apple (NASDAQ:AAPL). And true, the headwinds Alcoa faces are obvious and pretty significant.
But Wall Street has unfairly battered this industrial giant, and that creates a big opportunity for buy-and-hold investors.
Alcoa is a bargain. AA stock hasn’t seen the $9 level since spring 2009. Do you really have less confidence in the economy than you did almost three years ago, when the sting of the financial crisis was fresh in all our minds? Alcoa has a forward P/E of about 10 right now and a price/book of less than 0.7, so the depressed pricing seems to be an overreaction.
Fundamentally, Alcoa is looking better than you might think, too. Alcoa has seen year-over-year profit increases in each of the last eight quarters. It also has seen revenue go up year-over-year for seven straight quarters.
There’s also a modest 1.3% dividend to sweeten the pot, with the potential of an increase in 2012. That payment has been stagnant since March 2009, and stability in the company might mean a decent uptick in the quarterly payday for shareholders, since a dividend increase is long overdue.
Showing posts with label est shares to invest in 2012. Show all posts
Showing posts with label est shares to invest in 2012. Show all posts
7 Metal and Mining Stocks to Sell in 2012
7 Metal and Mining Stocks to Sell in 2012
Precious metals are in focus as uncertainty reigns in the market, but don’t think it means that all metal and mining stocks are a good investment. Many of these companies also deal with base metals like aluminum and copper — commodities in scarce demand as the global manufacturing sector continues to see headwinds.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. This week, I’ve got seven metal and mining stocks to sell.
Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
Agnico-Eagle Mines (NYSE:AEM) is a Canadian-based international gold producer. AEM stock has had a rough year, down 44% since the start of 2011.
Aluminum Corp. of China (NYSE:ACH) produces alumina, primary aluminum and aluminum fabrication in the People’s Republic. Like other metal and mining stocks, ACH has dropped big — 50% year-to-date.
ArcelorMittal (NYSE:MT) is a global steel producer that shipped approximately 85 million tons of steel in 2010. MT stock has been one of the biggest losers, down 60% year-to-date.
HudBay Minerals Inc. (NYSE:HBM) owns copper, zinc and gold mines, ore concentrators and zinc production facilities all across North America. A 50% loss year-to-date for HBM stock has shareholders questioning their initial investment.
Freeport-McMoran Copper & Gold (NYSE:FCX) is a mining company that works with copper, gold and other metals. Since the start of 2011, FCX stock has dipped 42%.
United States Steel (NYSE:X) is a producer of integrated steel products headquartered in Pittsburgh, Pa. Year-to-date, its stock has dropped 60% compared to a loss of just 1% for the Dow Jones.
Vale (NYSE:VALE) works with nickel, iron ore and iron ore pellets, manganese ore, ferroalloys, aluminum, fertilizers, copper and coal. VALE stock is down 34% year-to-date, compared to much smaller losses by the broader markets.
Get more analysis of these picks and other publicly traded stocks with Louis Navellier’s Portfolio Grader tool, a 100% free stock-rating tool that measures both quantitative buying pressure and eight fundamental factors.
Precious metals are in focus as uncertainty reigns in the market, but don’t think it means that all metal and mining stocks are a good investment. Many of these companies also deal with base metals like aluminum and copper — commodities in scarce demand as the global manufacturing sector continues to see headwinds.
I watch more than 5,000 publicly traded companies with my Portfolio Grader tool, ranking companies by a number of fundamental and quantitative measures. This week, I’ve got seven metal and mining stocks to sell.
Here they are, in alphabetical order. Each one of these stocks gets a “D” or “F” according to my research, meaning it is a “sell” or “strong sell.”
Agnico-Eagle Mines (NYSE:AEM) is a Canadian-based international gold producer. AEM stock has had a rough year, down 44% since the start of 2011.
Aluminum Corp. of China (NYSE:ACH) produces alumina, primary aluminum and aluminum fabrication in the People’s Republic. Like other metal and mining stocks, ACH has dropped big — 50% year-to-date.
ArcelorMittal (NYSE:MT) is a global steel producer that shipped approximately 85 million tons of steel in 2010. MT stock has been one of the biggest losers, down 60% year-to-date.
HudBay Minerals Inc. (NYSE:HBM) owns copper, zinc and gold mines, ore concentrators and zinc production facilities all across North America. A 50% loss year-to-date for HBM stock has shareholders questioning their initial investment.
Freeport-McMoran Copper & Gold (NYSE:FCX) is a mining company that works with copper, gold and other metals. Since the start of 2011, FCX stock has dipped 42%.
United States Steel (NYSE:X) is a producer of integrated steel products headquartered in Pittsburgh, Pa. Year-to-date, its stock has dropped 60% compared to a loss of just 1% for the Dow Jones.
Vale (NYSE:VALE) works with nickel, iron ore and iron ore pellets, manganese ore, ferroalloys, aluminum, fertilizers, copper and coal. VALE stock is down 34% year-to-date, compared to much smaller losses by the broader markets.
Get more analysis of these picks and other publicly traded stocks with Louis Navellier’s Portfolio Grader tool, a 100% free stock-rating tool that measures both quantitative buying pressure and eight fundamental factors.
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