Inspecting the performance of Alcoa's (NYSE:AA) share price over the last 15 years or so, the figures show the price today, other than the period surrounding January, 2009, when it plummeted to as low as $7.34 a share on the 2nd, is about the same as it was 15 years ago.
Today its share price is at $10.71, down $0.02, or 18 percent, as of 1:06 PM EDT.
This made me start to think that Alcoa may be in danger of being removed from the DJIA.
Even though they did have a decent last quarter, and their CEO believes demand should grow by 10 percent in the next year, it's hard to see that happening in the light of the darkening economic conditions, which is being revealed as the stimulus money runs down.
It's not just the performance of the company though, as its market cap is just at $10.94 billion, while newer companies in the tech industry like Apple (Nasdaq:AAPL), which has a market cap of $228.64 billion, and Google (Nasdaq:GOOG), which has a market cap of $155.54 billion, are far more representative of the type of economy we have in the U.S.
Either way, Alcoa looks like it's going to struggle for some time to come, and as the economic story unfolds, it's looking more and more like that aluminum demand and prices aren't going to grow in the way thought just a short month or two ago.
2 comments:
You're an idiot for even thinking or even posting such a blog!! Alcoa is the largest Aluminum producer in the world, Market cap means nothing in this market. It represents a successful American Industrial company that is across the globe. Dow Jones consists of variety of Companies that represent different industries of American economy. You can't switch Alcoa with a speculative companies such as Google or Apple. The idea of DOW JONES INDUSTRIAL is having companies that reflect the whole economy. Alcoa isn't going anywhere and it'll be $20+ by year end.
Next time you might suggest removing GE because it's trading 16 and put Goldman Sachs because it has one more digit! ;)
The problems are the union, heath care cost, retirement, I see AA having the same problems as GM,
I see it at $5 before year end.
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