Is Alcoa’s Stock a Good Buy Right Now?

December 16, 2012

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E = Equity to Debt Ratio Is Normal

The debt-to-equity ratio for Alcoa is normal. It’s much stronger than the debt-to-equity ratio for Aluminum Corporation of China (NYSE:ACH), yet it’s not quite as strong as the debt-to-equity ratio for Kaiser Aluminum (NASDAQ:KALU). Alcoa’s balance sheet is in negative territory and could be improved.

	Debt-To-Equity	Cash	Long-Term Debt
AA	.57	$1.43 Billion	$9.52 Billion
ACH	1.50	$1.81 Billion	$6.36 Billion
KALU	.37	$335.50 Million	$378.40 Million

T = Technicals on the Stock Chart Are Weak

Alcoa has performed poorly over the past three years. The past year has brought better results, but the stock is still in negative territory for that timeframe.

	1 Month	Year-To-Date	1 Year	3 Year
AA	2.43%	1.16%	-6.41%	-39.02%
ACH	.81%	35.20%	36.90%	61.97%
KALU	6.29%	4.81%	.27%	-60.07%

At 8.64, Alcoa is currently trading close to all its averages.

50-Day SMA	8.63
100-Day SMA	8.69
200-Day SMA	8.99

E = Earnings and Revenue Are Sporadic

Annual earnings and revenue have been unsteady. The decline in revenue from 2007 to 2009 was cause for concern, but the past two years have shown better results.

	2007	2008	2009	2010	2011
Revenue ($)in billions	29.28	26.90	18.44	21.01	24.95
Diluted EPS ($)	2.94	-.10	-1.23	.24	.55

Quarterly earnings and revenue have also been mixed. Q3 YoY saw declines in both revenue and earnings, but this was likely just a bump in the road.

	9/2011	12/2011	3/2012	6/2012	9/2012
Revenue ($)in millions	6.42	5.99	6.01	5.96	5.83
Diluted EPS ($)	.15	-.15	.09	.00	-.13

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