Guru Steven Romick trimmed his stake in Alcoa (AA, Financial) during the first quarter. Romick sold 944,000 shares at an average price of $28.62 per share.
Romick now owns 3,866,740 shares of Alcoa.
Alcoa has a market cap of $6.26 billion, an enterprise value of $9.02 billion, a price-book (P/B) ratio of 1.11, a price-sales (P/S) ratio of 0.65 and a quick ratio of 0.72.
Alcoa was founded on Oct. 1, 1888, as the Pittsburgh Reduction Co. It was based on technology developed by Alcoa's co-founder, Charles Martin Hall. Alcoa is the global industry leader among companies that engineer and manufacture lightweight metals. Alcoa produces aluminum, titanium and nickel, which are used in aircraft, automobiles, commercial transportation, packaging, oil and gas, defense and industrial applications.
Alcoa produced the first aluminum kettle and introduced aluminum foil to the world as well as aluminum furniture, the first aluminum wheel on any modern passenger car and aluminum cans with pull tab rings that could be opened by hand instead of with a can opener.
Alcoa solutions have helped shape every major advance in aviation including the world's first flying machine. Alcoa’s aluminum was used by the Wright brothers to build and create the engine block and the crankcase of their flying machine to reduce the weight of the aircraft, improving the chances of a successful flight. This helped the Wright brothers take off on Dec. 17, 1903 at Kitty Hawk, North Carolina, flying 20 feet above the ground. The flight lasted 12 seconds and covered a distance of 120 feet.
According to GuruFocus, Alcoa has a 5 of 10 financial strength rating with a cash to debt ratio of 0.59 and an equity-asset ratio of -0.03. Its Altman Z-Score of 0.93 indicates it is in some sort of financial distress and could potentially file for bankruptcy within the next two years.
The company has a 2 of 10 profitability and growth rating. It has an operating margin of 0.19%, a net margin of -4.40%, a return on assets (ROA) of -2.46%, a -3.60% (ROE) return on equity and a return on capital ROC (Joel Greenblatt (Trades, Portfolio)) of 0.73%.
Alcoa’s market price has gained an estimated 51% over the previous year. It is possible that Romick wanted to cash in on some of his profits.
Since Romick reduced his stake during the third quarter Alcoa’s market price has declined by an estimated 3%.
Disclosure: Author does not own any shares of this company.
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