Today's Pre-Market Trading Very Positive For Alcoa (AA)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Alcoa ( AA) as a pre-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 $256.9 million.
  • AA traded 74,280 shares today in the pre-market hours as of 9:28 AM.
  • AA is up 7.8% today from yesterday'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%. AA has a PE ratio of 25. Currently there are 7 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 25.2 million shares per day over the past 30 days. Alcoa has a market cap of $15.3 billion and is part of the basic materials sector and metals & mining industry. The stock has a beta of 0.63 and a short float of 4.7% with 3.01 days to cover. Shares are down 21.3% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Alcoa as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 17.4%. Since the same quarter one year prior, revenues slightly increased by 6.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ALCOA INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALCOA INC turned its bottom line around by earning $0.19 versus -$2.15 in the prior year. This year, the market expects an improvement in earnings ($0.98 versus $0.19).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Metals & Mining industry. The net income increased by 209.6% when compared to the same quarter one year prior, rising from -$178.00 million to $195.00 million.
  • Net operating cash flow has significantly increased by 68.23% to -$175.00 million when compared to the same quarter last year. In addition, ALCOA INC has also vastly surpassed the industry average cash flow growth rate of -35.64%.
  • 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.

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