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NEW YORK (TheStreet) -- Alcoa (AA) - Get Alcoa Corporation Report investors are no longer  "making the best of a bad situation." They're making a lot of money and will for some time.

Wth its recent $3 billion acquisition of Firth Rixson, a U.K.-based maker of jet-engine components, Alcoa management has essentially proclaimed the sky's the limit when it comes to long-term growth.

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Since the deal was announced, Alcoa stock soared more than 5% to a new 52-week high of $15.18. Shares closed Thursday at $14.98 and are now up nearly 41% for the year to date.

Some investors may wonder when the landing gears will emerge. Not so fast.

The Firth Rixson deal may seem expensive but management saw a deal they couldn't pass up. By acquiring Firth, Alcoa is aligning itself with the aerospace industry, where it has sought to grow aluminum revenue with (among others) Boeing (BA) - Get Boeing Company Report.

From that standpoint, this deal should pay for itself. But assuming the Boeing angle was not considered, this deal -- on its own -- still presents considerable value for Alcoa, which just acquired a strong position in an area -- isothermal technology -- that is projected to triple its growth in the next eight years.

The addition of Firth Rixson materially expands Alcoa's product portfolio. As of now, Alcoa should not be seen as a company solely tied to the ups and downs of the commodity aluminum industry. With Firth's capabilities in specialized isothermal technology, Alcoa immediately becomes more diversified.

Firth, the world's largest supplier of seamless rings for aero-engines, will also provide Alcoa an additional source of revenue with its rings and metal products business. What's more, management anticipates 60% revenue growth for Firth's business in the next three years, which will contribute $350 million in Ebitda for Alcoa the next two years.

When you consider Firth's projected revenue is expected to grow 12% annually through 2019, double the growth rate of he aerospace industry, what's not to like? Not to mention, 70% of that growth is guaranteed through long-term contracts.

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All told, this deal was a no-brainer and Alcoa's stock should continue to trend higher until at least 2020.

Some are claiming the stock is not as attractive as it was three months ago at around $12. I won't disagree with that. But it's not yet time to cash in -- not when management is clearly working to reinvent the company.

Alcoa will report second-quarter earnings Tuesday. Wall Street will be looking for 12 cents per share in earnings on revenue of $5.66 billion. This quarter's results won't matter much, however. Alcoa's future is about the next six to eight years.

To that end, additional color about the Firth acquisition, particularly about accretive metrics is what will matter Tuesday. Guidance for the next quarter and any upward revision will send the stock soaring even higher. But even then, the Alcoa value creation story has only just begun. Management is penning a masterpiece.

At the time of publication, the author held no position in any of the stocks mentioned.

Follow @Richard_WSPB

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

TheStreet Ratings team rates ALCOA INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALCOA INC (AA) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid stock price performance. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, AA's share price has jumped by 92.77%, exceeding the performance of the broader market during that same time frame. Although AA had significant growth over the past year, our hold rating indicates that we do not recommend additional investment in this stock at the current time.
  • AA, with its decline in revenue, underperformed when compared the industry average of 4.4%. Since the same quarter one year prior, revenues slightly dropped by 6.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • ALCOA INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, ALCOA INC swung to a loss, reporting -$2.15 versus $0.17 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus -$2.15).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, ALCOA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 219.5% when compared to the same quarter one year ago, falling from $149.00 million to -$178.00 million.