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Fundamental analysis: Alcoa Corporation (AA)

Awarener score: 6.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Good), the business stability (Modest) and growth (Poor), and the company's inclination to return cash to the stockholders (Good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 4.0

  • Business has been shrinking. It's been substantially worse when measured against peer companies.
  • Alcoa Corporation business trend isn't so stable. The higher the stability, the lower the risk. It looks well ranked against rivals.

Margins score: 5.7

  • AA profit margins -on goods and services sold- are usually meagre. They stand slightly better than rival companies.
  • Business profit on sales tends to be very good. It's more than average in relation to competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain close to average when compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be hardly sufficient in relation to total revenues. They're still slightly worse than similar companies.
  • Profits -before income taxes- are usually sufficient considering total sales, and remain similar to rivals.
  • Total net profit tends to be hardly sufficient when confronted to sales. Company stands below average when measured against comparable firms.

Growth score: 3.9

  • Alcoa Corporation profit -on goods and services sold- has been growing at a low pace. It's been close to average when compared to competitors.
  • In recent years, earnings -on operations- have been growing at an excellent step, which has been somewhat better than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at an excellent pace, which compares encouraging in relation to peer enterprises.
  • In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
  • In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
  • In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
  • The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 7.0

  • AA had to pay too much income taxes in relation to profits made in the past years. It's been worse than most peers.
  • Research and development expenses hardly consume a portion of revenues. It's almost average when measured against competitors.
  • The company shows very good business growth in relation to research and development efforts. It stands lacking compared to rival companies.

Profitability score: 6.5

  • Alcoa Corporation usually gets good returns on the resources it controls. It proves almost average when measured against peer firms.
  • The company normally gets good proceeds -on the resources directly invested in the business-. They remain rather normal in relation to similar companies.
  • Profitability -in relation to owned resources- is usually modest. It ranks below average when measured against competitors.
  • In the past, got good returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's almost average when measured against comparable enterprises.

Usage of Funds score: 7.2

  • AA usually uses a sparse portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is modest. It stands almost average when measured against rival firms.
  • The company is usually replacing some proportion of the property, plant, and equipment that gets old, saving part of the funds for something else, which is last-in-rank when measured against industry peers.
  • In the past twelve months it paid low dividends, considering the current stock price. It came mediocre against competitors.
  • Has recently started or restarted paying dividends to stockholders. Business prospects are most likely good. The company has behaved impressive in relation to similar firms.
  • Dividend payments usually represent a non-significant portion of genuine funds generation and are likely very safe. Sustainability looks top-notch against comparable companies.
  • The company usually neither enlarges nor reduces the pool of investors, resulting in approximately the same mouths feeding on the pie of profits. It remains in good shape compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands close to average when compared to rivals.
  • The company uses a low portion of genuine fund generation to reward investors, which can most likely be sustained. It still looks similar to competitors.

Balance Sheet score: 6.0

  • Alcoa Corporation has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
  • The company has roughly double short-term resources than short-term obligations. Liquidity concerns are normally not an issue. It turns to be in a very weak position compared to similar firms.
  • Roughly a tenth of resources controlled were provided for with financial debt. Creditors have minor claims on the company, and financial position is safe. It remains somewhat better than rival firms.
  • Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks similar to rivals.
  • For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's in a very weak position compared to peer firms.
  • For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is somewhat worse than similar enterprises.
  • Usually, sales are on less than a month credit. It still ranks more than average in relation to peers.
  • Normally has approximately three months of sales worth in inventory. It comes up as in a very weak position compared to competitors.
  • On average, it takes higher than four months from the purchase to charging customers. It happens to be mediocre against peers.
  • On average pays suppliers longer than two months after the purchase. It ranks more than average in relation to industry peers.
  • The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's lacking compared to similar companies.
  • Net interest expenses consume a portion of usual business earnings, but are bearable. It stands somewhat worse than rival firms.
  • Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks more than average in relation to comparable enterprises.
  • Revenues are somewhat low in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. The more property, plant, and equipment used, the more the company must reinvest to fight obsolescence, which usually means less available funds for the shareholders in the long run. It looks a slight improvement compared to similar firms.
  • Resource exploitation is very good when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 5.7

  • Alcoa Corporation reported losses, so valuating it in relation to earnings is meaningless. It happens to be similar to competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains close to average when compared to peers.
  • In the past twelve months, the company generated excellent free funds in relation to the stock price, which stands better than most similar companies.
  • The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still similar to industry firms.
  • In the past twelve months, the company has barely rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
  • The company has neither net debt nor net cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks slightly better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation has been negative, as the company lost money. It ranks almost average when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a not far from one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks rather normal in relation to rival firms.
  • The relation between the stock price and accounting book value is somewhat high. It's important both to check this metric through time and to compare it with rival companies. The company remains slightly worse than peer firms.
  • In the past twelve months, the operating business lost some money. It happens to be encouraging in relation to industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a mediocre earnings power ability when measured against the current stock price and financial position. It's still lacking compared to peer companies.

Total score: 5.8


AA logos

Company at a glance: Alcoa Corporation (AA)

Sector, industry: Basic Materials, Aluminum

Market Cap: 8.69 billions

Revenues TTM: 13.13 billions

Alcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses. The company offers primary aluminum in the form of alloy ingot or value-add ingot to customers that produce products for the transportation, building and construction, packaging, wire, and other industrial markets. In addition, it owns hydro power plants that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.

Awarener score: 6.0

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Good), the business stability (Modest) and growth (Poor), and the company's inclination to return cash to the stockholders (Good).