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Ford And Toyota Are Reasons Why Alcoa Might Be A Buy

Thursday - 4/4/2013, 8:17pm  ET

In this video, Motley Fool analyst Taylor Muckerman outlines three reasons to buy Alcoa . First, there is a rebound in the global economy, particularly in China and, to a lesser extent, the United States. Demand for aircraft, autos, and truck trailers are projected to drive aluminum demand. Second, Alcoa is actively restructuring its business and pursuing other means of reducing its costs. Lastly, Alcoa is set on maintaining its investor grade credit rating which means that it can expand its business through the debt market at attractive rates if it chooses.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here now to get started.