But the thing is, the prospects look great for Alcoa. The company has been transitioning from a bulk aluminum producer to a value-added producer of finished products. A couple key acquisitions in the aerospace sector have made it a major supplier for Boeing. And Boeing is going great guns with its new line of planes.
Alcoa is also a critical supplier for Ford's new aluminum-bodied trucks. All indications are that this truck is being very well received. Other car companies will follow Ford's success, as adding more aluminum lowers overall weight and improves performance and gas mileage.
Alcoa has beaten earnings expectations in each of the last four quarters, yet analysts still will not raise forward estimates. With a forward P/E of 10 and a high probability that it will continue to beat earnings expectations, Alcoa should trade between $18 and $20 by the end of the year.
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