Topic: Growth Stocks

Wall Street Stock Forecaster Hotline – Friday, October 2, 2015

Article Excerpt

ALCOA INC., $9.52, New York symbol AA, plans to split itself into two separate firms. One will focus on Alcoa’s upstream operations, which include mining bauxite ore and refining it into bulk aluminum products. This business will be the world’s fourth-largest aluminum producer, with $13.2 billion of annual revenue and gross earnings of $2.8 billion. The other company will focus on engineered aluminum products, such as components for cars and jet engines. This firm has $14.5 billion of annual revenue and gross earnings of $2.2 billion. If shareholders approve, Alcoa will complete the split in the second half of 2016. The company will hand out shares of both companies to its investors, who will not be liable for capital gains taxes until they sell them. The split will help unlock some of Alcoa’s value, particularly as demand for its engineered products is growing much faster than bulk aluminum. The upstream business could also become an attractive takeover target for a larger mining firm. Alcoa is…