03.07.2014 - Alcoa becomes more attractive
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.