Alcoa Corp

Vertically integrated aluminum producer with a strong rebound year but commodity price-taker economics and no pricing power.

Strengths

• Strong cash ($3.0B, 94th pct) and FCF (85th pct); ROA 84th pct and net margin 71st pct in an up year
• Earnings sharply recovered (net income +18x off a depressed base)

Risks

• Pure commodity cyclical tied to LME/alumina prices with significant earnings volatility
• Energy-cost, environmental/impoundment liabilities and China-driven oversupply exposure

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• Strong balance sheetStrong balance sheet — $3.0B cash & investments