The stock price of aluminum giant Alcoa continues to gradually increase due to diversification of business of the corporation and also in connection with expectation of long-term growth in aluminum prices due to the growth of high-tech manufacturing in the world.
We recall that the company changed its strategy of development and acquired Firth-Rixson - component manufacturer of jet engines. This step helped to increase revenue by rapidly growing aerospace market. Turning the company into a vertically integrated holding has a number of competitive advantages over companies in the same sector. This year, proceeds from the production of aerospace components according to analysts will increase by 20%.
We recommend keeping the stock in the long term portfolio with the potential of growth of around 20% per year.