why alcoa stock down

Should you buy Alcoa (AA) Stock as it comes down?

TheStreet's Jim Cramer explains why investors should buy Alcoa (AA) stock as it comes down. NEW YORK ( TheStreet) -- TheStreet's Jim Cramer says the Alcoa ( AA) - Get Alcoa Corporation Report that he is used to, one buffeted by commodity prices for aluminum, is going away, replaced by a highly sophisticated, proprietary form of material.

Is Alcoa’s short interest declining?

Alcoa saw a decline in short interest in January. As of January 15th, there was short interest totaling 11,330,000 shares, a decline of 23. 2% from the December 31st total of 14,750,000 shares. Based on an average daily trading volume, of 8,100,000 shares, the days-to-cover ratio is currently 1. 4 days. Currently, 6.

What is the upside for Alcoa's stock?

On average, they anticipate Alcoa's stock price to reach $28.25 in the next twelve months. This suggests a possible upside of 32.8% from the stock's current price. View Analyst Price Targets for Alcoa.

Is Alcoa's aluminum production slowing down?

To be sure, Alcoa realized 14% higher average prices for aluminum sequentially, but its production volumes fell short of estimates. Alcoa's aluminum production was down 10% sequentially as it cut back production at its San Ciprián smelter in Spain.

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NYSE: AA

What happened

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So what

Shares of Alcoa ( AA 6.21% ) tanked Thursday, closing the day down 11% and marking its steepest fall so far this week. Investors have been excited about the aluminum giant's prospects so far this year, but the optimism appears to be fading.

NYSE: AA

Alcoa is a pure-play aluminum stock, so the meteoric rise in aluminum prices this year unsurprisingly spurred heavy investor interest in the stock. It's never a one-way ride for Alcoa shares, though, given that it's a commodity stock that typically moves with fluctuations in commodity prices.

Now what

Earlier this week, data coming from China revealed lower-than-expected 6.4% growth in industrial production for July. That's triggered fears of decelerating growth in China, putting metal prices under pressure.

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Alcoa recently delivered stellar numbers, including record net income, for its second quarter, thanks almost entirely to higher aluminum prices. The company also was banking on higher prices for a strong second half of 2021.

What happened

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So what

Shares of Alcoa ( AA ) traded down more than 10% on Thursday after the aluminum producer reported fourth-quarter results that were worse than expected. Alcoa said it expects a worldwide surplus in aluminum this year, which it says will weigh on results despite the company's efforts to streamline.

Now what

After markets closed Wednesday, Alcoa reported a fourth-quarter loss of $0.31 per share on revenue of $2.44 billion, falling well short of analyst expectations for a loss of $0.22 per share on revenue of $2.49 billion.

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Alcoa has a long-term plan to address these difficult market dynamics, including selling upward of $1 billion worth of noncore assets and shifting away from aluminum production and toward higher-margin businesses.

About Alcoa

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Alcoa (NYSE:AA) Frequently Asked Questions

Alcoa Corp. engages in the production of bauxite, alumina, and aluminum products. It operates through the following segments: Bauxite, Alumina, and Aluminum. The Bauxite segment represents the company' global bauxite mining operations. The Alumina segment includes the company's worldwide refining system, which processes bauxite into alumina.

What happened

11 Wall Street research analysts have issued "buy," "hold," and "sell" ratings for Alcoa in the last year. There are currently 3 hold ratings and 8 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should "buy" Alcoa stock. View analyst ratings for Alcoa or view top-rated stocks.

So what

Shares of Alcoa (NYSE: AA) tanked Thursday, closing the day down 11% and marking its steepest fall so far this week. Investors have been excited about the aluminum giant's prospects so far this year, but the optimism appears to be fading.

Now what

Alcoa is a pure-play aluminum stock, so the meteoric rise in aluminum prices this year unsurprisingly spurred heavy investor interest in the stock. It's never a one-way ride for Alcoa shares, though, given that it's a commodity stock that typically moves with fluctuations in commodity prices.

What happens if you buy Alcoa stock?

Alcoa recently delivered stellar numbers, including record net income, for its second quarter, thanks almost entirely to higher aluminum prices. The company also was banking on higher prices for a strong second half of 2021.

Will China release metal in batches?

If you buy and hold Alcoa stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you - at least if the company is otherwise strong.