Shortly before the important quarterly figures from Alcoa, another representative of the raw material sector is increasingly moving into investor focus. The courses attract.
• Century aluminum share increases by 12 percent within five days
• Customs and industry rotation as possible spa drivers
• Investors rely on Century Aluminum as an alternative to Alcoa
With Century Aluminum, a raw material company has recently become increasingly on the shopping notes of investors: the group’s share has increased around twelve percent in the last five trading days on Nasdaq – on Friday alone, the title attracted $ 6.70 to $ 20.71. A continuation of the rally – albeit to a braked extent – indicates: the Century Aluminum share gains another $ 0.43 percent to $ 20.80.
What is behind the rally?
There are no course -moving current company messages, but the promptly upcoming industry figures could throw their shade ahead. This week, the Century competitor Alcoa will open his books and report on his business development in the past second quarter. Analysts expect that the aluminum manufacturer in the reporting quarter could grow in terms of sales and profits: While the revenue is given a value of $ 2.909 billion (previous year: $ 2.831 billion), the profit per share is expected to increase from $ 0.329 to $ 0.329.
Since the Alcoa share, according to Tipranks, only has a manageable upward potential from around five percent to $ 32.81 and is rated as a “moderate purchase”, investors may be looking for alternative investments from the industry and, against this background, came across Century Aluminum.
According to the latest price gains, however, an overvaluation can be seen from the analyst side: the average price target is around 4.6 percent below the current price level with $ 19.75.
Tailwind through new customs policy
Century aluminum probably also benefits from the recent trade policy decision of the US government. The company expressly advocates President Trump’s decision to raise US tariffs to aluminum imports from 25 percent to 50 percent.
In a statement in June, Century Aluminum described this measure as an important step for security of supply and investments in the US location. The higher tariffs could give the company a competitive advantage over foreign competitors.
“President Trump has decided to produce US aluminum and American jobs,” Jesse Gary, President and CEO of Century Aluminum, is quoted in a press release. “We thank President Trump for putting America again in the first place and supporting the recovery of the domestic aluminum industry”.
Financial challenges in the first quarter
Century aluminum will soon be on the agenda. It remains to be seen whether these already show positive effects of Trump’s customs policy.
In the first quarter, Century aluminum was still faced with financial challenges. At $ 29.7 million, the net win was significantly lower than in the previous quarter. This development was mainly caused by increased costs and losses from security business. The operational result (EBITDA) was $ 78 million. Management gave a positive outlook for the second quarter, which indicates a possible financial recovery.
Global presence as a strategic advantage
Century aluminum has a diversified international presence that goes beyond the US locations. The company also operates works in Iceland, the Netherlands and Jamaica, which enables him to have a certain risk diversification.
This global list could prove as a strategic advantage, especially in times of geopolitical tensions and volatile raw material markets.
Editor finance.net
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