Alcoa is released 2Q earnings a few hours ago. Management is doing a first rate job of readjusting to the new realities. They have moved forcefully to eliminate costs and drive cash flow. This is exactly what owner's want to see in an Enterprise. Brutal and quick action to protect the owner's interests.
Gudovac1941 stands by his June 26th analysis that Alcoa is a buy at $6 a share
Alcoa management has successfully managed to stop the cash flow bloodbath of the past 3 quarters. 2Q free cash flow is neutral. Management's achievment is remarkable in the face of a staggering decline in prices and volume.
Gudovac1941 calculates that Alcoa has a $12 billion Enterprise Value. $10 billion debt on Alcoa's books subtracts a significant amount of value from the share value. After subtracting out the debt, only $2 billion of value remains for the owners. As this debt gets paid down, the share value will improve significantly. $2 billion translates into a $6 per share price.
Alcoa is a great company will dedicated managers who can successfully prosper in the hard times.
Don't get massacred
Gudovac1941
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