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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Alcoa Corporation (XNYS:AA) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
AA
Name:
ALCOA CORPORATION (XNYS:AA)
Sector:
- 40000.00K
Industry:
Aluminum
CEO:
Mr. Roy Harvey
Total Employees:
12,200
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 52.89% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF ALCOA CORPORATION(AA) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ALUMINUM INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
49.25
One Month Price Target:
$49.89
Six Month Price Target :
$53.08
Likely Price in One Year's Time:
Ticker:
$56.91
Likely Trading Range Today Under (Normal Volatility)
$48.99
Price Upper limit ($) :
$49.73
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$44.89
This week:
$39.51
This month :
$29.77
Other Primary facts
Market Cap:
8.62B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
179.93M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
28.22%
-21.07%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$69.43
$60.01
$29.07
$38.49
Medium risk (<10%) entry points
Buy Call
Sell Call
$56.94
Buy Put:
Sell Put:
$54.93
$41.53
$43.57
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
AA
Sharpe Ratio:
4.88%
Comparison:
AA, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 125.84% higher than the industry
& ratio is 113.89% higher than the market/S&P 500 average
Average Returns/Yield of
AA
Daily returns:
0.22%
Weekly returns:
1.12%
Monthly returns:
4.48%
Yearly returns:
26.90%
Comparison of returns:
Average annual returns/yield (last 3 years) is 99.90% above industry average
Classification:
AA, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
AA has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
4.41%
Weekly Volatility:
9.87%
Monthly Volatility:
19.74%
Yearly Volatility:
68.40%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
4.46%
Volatility in last five trading days has been 1.09% above long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-8.84%
Weekly VaR:
-19.77%
Monthly VaR:
-39.55%
How Much Can the price of
AA
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-32%
Worst case (decline):
>85%
This translates to price declining to:
$33.30
This translates to price declining to:
$7.39
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
AA is a 179.12% riskier investment compared to the market/S&P 500 & is 139.13% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 3.10% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
AA
Beta in relation to market/S&P 500--2.32
Expected beta in 1 year's time:
1.142
Expected beta in 3 year's time:
1.615
Unlevered (debt free) Beta:
1.919
Beta in relation to Nasdaq (XNAS):
1.053
Beta in relation to all global stocks::
1.133
Beta Comparison & Analysis
Beta of competitors/peers::
1.204
Beta is 92.29% higher than peers
Average Industry Beta:
1.971
Beta is 17.48% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
10.57%
Sustainable growth rate is 0.00% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.348
Alpha is 239.14% above industry average alpha yield
Alpha is 2213% higher than market/& is unsustainably high
Analysis of Cost of Capital of
AA
Equity cost of capital:
0.190
Equity cost of capital is 14.17% above industry mean WACC
Unlevered (without debt) cost of capital:
15.76%
Before-tax cost of debt:
10.30%
After-tax cost of debt:
8.14%
Overall debt rating:
Non-investment grade (junk/speculative grade
Weighted average cost of capital (WACC):
8.14%
WACC is 28.86% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$69.89
Revenue growth rate per share of (3Y):
1.42
Annual revenue growth rate is -135.30% below industry average
EPS:
$3.74
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
$3.09
-
-
Debt per share
$9.60
EBITDA per share
$15.50
Valuation Analysis Today of
AA
P/E Ratio:
9.72
P/E Ratio of Competitors/Peers:
10.45
P/E ratio is -6.99% lower than main peers & is -69.37% lower than the industry
Stock price/value with industry average P/E ratio: $118.64
AA is -58.49% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $7.39
Present value of the expected future dividends only: $1.58
P/S (Price to Sales ratio):
0.7
Price to sales ratio is -24.51% below the industry mean
P/B (Price to book value ratio):
1.42
Price to free cash flow: 15.93
-
Net income growth rate (3Y):
89.35%
Net income growth rate is 136.55% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 2.49%
Dividend yeild: 0.61%
Previous Dividend: $0.10
Previous adjusted dividend: $0.10
Previous Dividend: $0.30
-
-
Average dividend payment (long-term): $0.10
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 09/01/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 06/03/2022
Previous dividend record date: 17/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-16--$0.10
2021-10-28--$0.10
--$0.00
2022-03-07--$0.10
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
37.72%
Net debt to equity ratio:
3.80%
Debt to assets ratio:
10.80%
Net debt to assets ratio:
1.09%
Debt-to-asset ratio is -84.37% below industry average
Ability to repay debt:
Interest coverage ratio:
15.66
Interest coverage ratio is 293.06% more than industry average
Looking forward:
Debt growth rate:
-32.19%
Annual debt growth is -327% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.53
Statistical significance of correlation:
AA has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.476
Stock price is 11.21% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.476
Correlation of price movement with Nasdaq (^IXIC):
0.056
Covariance of price movement with the market:
0.143
Kurtosis
4.292
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.084
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
AA
Gross Profit Margin Ratio:
112%
Operating Profit Margin Ratio:
20.68%
Operating profit margin is -680.25% lower than the industry
Net Profit Margin Ratio:
112%
Effective Tax Rate:
45.21%
Effective tax rate is 33.16% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
15.79%
Return on equity (ROE) is -186.33% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.52%
Return on assets (ROA) is -188.16% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
1.62
Current ratio is -10.04% below industry average
Cash Conversion Cycle (days):
-21
Cash conversion cycle is -141.43% below industry average
The remaining useful life of property plant & equipment is: 2.5 years
Stock based compensation to net income ratio:
1.24%
In-depth Efficiency Analysis
Revenue generated per employee:
1.0M
Each employee generates 9% more revenue than industry average revenue per employee
EBITDA generated per employee:
228.5K
Each employee generates 135% more EBITDA than industry average revenue per employee
Profit generated per employee:
59.3K
Each employee generates 243% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 3.3K
Each employee generates 81% more free cash flow than industry average revenue per employee
Assets/Capital per employee
851.6K
Each employee generates 81% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 14.81%
Growth rate in R&D investment/expenditure is 48.10% higher than the industry
Competitors/Peer firms of
AA
CLEVELAND-CLIFFS INC. (XNYS:CLF)
RPM INTERNATIONAL INC. (XNYS:RPM)
AGNICO EAGLE MINES LIMITED (XNYS:AEM)
RELIANCE STEEL & ALUMINUM CO. (XNYS:RS)
KIRKLAND LAKE GOLD LTD. (XNYS:KL)
WESTLAKE CORPORATION (XNYS:WLK)
ICL GROUP LTD (XNYS:ICL)
West Fraser Timber Co. Ltd. (XNYS:WFG)
CEMEX PUBLICLY TRADED STOCK CORPORATION WITH VARIABLE CAPITAL (XNYS:CX)
Current Analyst Ratings
Strong buy�13%
Buy�25%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
12.58B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
9.04B
3.53B
33.00M
-
219.00M
-
642.00M
894.00M
-
178.00M
1.14B
2.79B
2.60B
723.00M
1.65B
746.00M
723.00M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
- 4000.00K
Stock Based Compensation :
9.00M
Change in Working Capital :
- 817000.00K
Accounts Receivables:
-
Other Working Capital:
- 42000.00K
Other Non-Cash Items:
293.00M
Net Cash Provided by Operating Activities:
34.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
- 21000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
1.55B
-
1.55B
1.05B
2.50B
499.00M
5.60B
6.82B
-
-
1.22B
667.00M
1.68B
10.39B
-
15.99B
1.65B
1.00M
358.00M
-
1.82B
3.47B
1.73B
4.54B
6.27B
-
9.73B
2.00M
114.00M
- 5074000.0K
-
March 31, 2022 at 6:00:00 AM
9.94B
4.58B
14.31B
-
1.73B
174.0M
-
- 72000.00K
- 93000.00K
-
-
- 75000.00K
- 18000.00K
- 116000.00K
- 209000.00K
9.00M
- 259000.00K
1.67B
1.92B
34.00M
- 74000.00K
- 40000.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
AA
2023
2024
2025
2026
2027
$54.42
$62.89
$72.68
$83.99
$97.05