3 Top-Rated Aluminum Stocks to Buy on the Dip

In addition to being essential to the construction industry, aluminum’s capacity to conduct heat and electricity makes it a popular choice for the electrical and electronics industries. While the demand for aluminum is rising with the…

reopening of industrial sectors worldwide, China, the world’s biggest manufacturer of base metals, reduced its production to comply with its climate policies. As a result, aluminum prices rose to 13-year highs in September.

Earlier this month, aluminum prices reached $3,064 per ton on the London Metal Exchange, registering its highest price since July 2008. Furthermore, the aluminum market is expected to increase at a 5% CAGR between 2021-2026.

Given this backdrop, we think it could be profitable to scoop up fundamentally strong aluminum stocks Aluminum Corporation of China Limited (ACH), Alcoa Corporation (AA), and Constellium SE (CSTM), which have suffered price dips lately.

Aluminum Corporation of China Limited (ACH)

ACH and its subsidiaries manufacture primary alumina products in China. It operates through the broad segments of Alumina; Primary Aluminum; Trading, and Energy. The company is based in Beijing.

For its third fiscal quarter, ended December 31, 2020, ACH’s gross profit increased 10.5% year-over-year to $2.06 billion. Its profit for the year came in at $241.08 million, up 5.5% from the prior year. Its total comprehensive income for the year rose 12.7% year-over-year to $259.41 million.

A $35.74 billion consensus revenue estimate for the current year (fiscal 2021) indicates a 23.4% year-over-year increase.

The stock has gained 195.3% in price over the past year but declined 6.9% over the past five days to close yesterday’s trading session at $16.80.

ACH’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

ACH has a Growth, Value, and Sentiment grade of A, and a Momentum grade of B. In the six-stock, B-rated Aluminum industry, it is ranked #1. In addition to the POWR Rating grades we’ve stated above, one can see ACH ratings for Stability and Quality here.

Alcoa Corporation (AA)

AA is the seller of bauxite, alumina, and aluminum in the United States and overseas. The Pittsburgh, Pa.-based company is engaged in bauxite mining, alumina refining, and an advanced aluminum smelting solutions network.

On October 14, AA announced a $500 million share repurchase program and a $0.10 per share quarterly dividend payable on November 19. These developments are in line with the company’s capital allocation framework and reflect its confidence in its cash generation ability.

On September 30, the company announced a binding partnership between…


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