Trade-Ideas LLC identified

Alcoa

(

AA

) as a post-market leader candidate. In addition to specific proprietary factors, Trade-Ideas identified Alcoa as such a stock due to the following factors:

  • AA has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $191.3 million.
  • AA is up 2% today from today's close.

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More details on AA:

Alcoa Inc. produces and manages primary aluminum, fabricated aluminum, and alumina worldwide. The company operates through four segments: Alumina, Primary Metals, Global Rolled Products, and Engineered Products and Solutions. The stock currently has a dividend yield of 1.5%. AA has a PE ratio of 17. Currently there are 5 analysts that rate Alcoa a buy, 1 analyst rates it a sell, and 5 rate it a hold.

The average volume for Alcoa has been 21.7 million shares per day over the past 30 days. Alcoa has a market cap of $9.9 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.74 and a short float of 5.2% with 2.73 days to cover. Shares are down 47.7% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Alcoa as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 18.9%. Since the same quarter one year prior, revenues slightly increased by 1.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Metals & Mining industry average. The net income increased by 1.4% when compared to the same quarter one year prior, going from $138.00 million to $140.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, ALCOA INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Looking at the price performance of AA's shares over the past 12 months, there is not much good news to report: the stock is down 45.28%, and it has underformed the S&P 500 Index. In addition, the company's earnings per share are lower today than the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • AA's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that AA's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.69 is low and demonstrates weak liquidity.

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