Why aluminum companies’ stocks have surged

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Nov. 20 2020, Updated 4:23 p.m. ET

Aluminum companies’ stock market returns 

We looked at a brief overview of Alcoa in the first part of the series. Most aluminum companies’ stocks have delivered excellent returns on Wall Street. Some of the major aluminum producers are Alcoa (AA) and Century Aluminum (CENX). Constellium (CSTM) and Kaiser Aluminum (KALU) focus on aluminum fabrication. All of these companies can give investors exposure to the aluminum industry.

share returns

Returns from aluminum companies’ stocks

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The chart above shows aluminum companies’ returns. As you can see, Alcoa and Century Aluminum delivered excellent returns. Century Aluminum led the way. It’s stock has more than tripled since the beginning of 2013. This surprised analysts. Until about two years ago, most brokerages had a sell rating on Century Aluminum. However, in the past few months brokerages have upgraded their price targets for Century Aluminum. You can read a complete overview of Century Aluminum to understand more about the company.

Outlook for aluminum companies

We’ve analyzed aluminum companies’ returns. However, historical facts are like looking in the rear view mirror while you’re driving. Historical facts are important, but our attention needs to be on the future.

The current uptrend in aluminum companies’ shares is a result of the positive outlook for aluminum demand. We’ll discuss this in the next part of the series.

Another way to access the metals industry is through the SPDR S&P Metals and Mining ETF (XME). Exchange-traded funds (or ETFs) are a cost effective way for retail investors to gain exposure to the industry.

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