Fact based stock research
Alcoa (NYSE:AA)
US0138721065
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Alcoa stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), Alcoa (Aluminum, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Alcoa are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), and are riskily financed (Safety Rank of 20, which means above-average debt burdens) but show above-average growth (Growth Rank of 59). ...read more
RECOMMENDATION: A Combined Rank of 25, is a hold recommendation based on Alcoa's financial characteristics. As the company Alcoa shows low value with an Obermatt Value Rank of 48 (52% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 59% of comparable companies (Obermatt Growth Rank is 59). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 20 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Alcoa, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Aluminum |
| Index | Low Emissions, Energy Efficient, Diversity USA, Renewables Users, Water Efficiency |
| Size class | XX-Large |
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Alcoa
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 21 |
|
41 |
|
55 |
|
48 |
|
| GROWTH | ||||||||
| GROWTH | 43 |
|
97 |
|
15 |
|
59 |
|
| SAFETY | ||||||||
| SAFETY | 39 |
|
57 |
|
70 |
|
20 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
35 |
|
8 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
63 |
|
18 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), Alcoa (Aluminum, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Alcoa are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), and are riskily financed (Safety Rank of 20, which means above-average debt burdens) but show above-average growth (Growth Rank of 59). ...read more
RECOMMENDATION: A Combined Rank of 25, is a hold recommendation based on Alcoa's financial characteristics. As the company Alcoa shows low value with an Obermatt Value Rank of 48 (52% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 59% of comparable companies (Obermatt Growth Rank is 59). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 20 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Alcoa, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 21 |
|
41 |
|
55 |
|
48 |
|
| GROWTH | ||||||||
| GROWTH | 43 |
|
97 |
|
15 |
|
59 |
|
| SAFETY | ||||||||
| SAFETY | 39 |
|
57 |
|
70 |
|
20 |
|
| COMBINED | ||||||||
| COMBINED | 29 |
|
83 |
|
33 |
|
25 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Alcoa shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Alcoa. Price-to-Sales (P/S) is 77, which means that the stock price compared with what market professionals expect for future sales is lower than for 77% of comparable companies, indicating a good value concerning Alcoa's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 53, which means that dividends are expected to be higher than for 53% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 65% of alternatives (only 35% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 76% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Alcoa's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 57 |
|
73 |
|
87 |
|
77 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 45 |
|
54 |
|
28 |
|
24 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 30 |
|
15 |
|
48 |
|
35 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
43 |
|
59 |
|
53 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 21 |
|
41 |
|
55 |
|
48 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Alcoa shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Alcoa. Profit Growth has a rank of 79, which means that currently professionals expect the company to grow its profits more than 79% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 75 (above 75% of alternative investments). But Sales Growth has a below the median rank of 29, which means that, currently, professionals expect the company to grow less than 71% of its competitors, and Capital Growth also has a lower rank of 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Alcoa. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 29 |
|
50 |
|
45 |
|
29 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | n/a |
|
88 |
|
4 |
|
79 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
84 |
|
82 |
|
41 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 100 |
|
97 |
|
11 |
|
75 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 43 |
|
97 |
|
15 |
|
59 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company Alcoa has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Alcoa is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Alcoa and the other two below average. Leverage is at a rank of 50 meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors.Refinancing is at a rank of 41, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 59% of its competitors. Liquidity is at a rank of 13, meaning that the company generates less profit to service its debt than 87% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), Alcoa has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Alcoa are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Alcoa and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 42 |
|
34 |
|
56 |
|
50 |
|
| REFINANCING | ||||||||
| REFINANCING | 26 |
|
96 |
|
73 |
|
41 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 67 |
|
37 |
|
60 |
|
13 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
|
57 |
|
70 |
|
20 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
82 |
|
17 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
8 |
|
11 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
11 |
|
17 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
84 |
|
39 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
35 |
|
8 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Alcoa from November 14, 2024.
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