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Alcoa: Commodity Volatilty But Plenty Of Upside

Summary

Alcoa shares have taken a beating of late.

However, the company split is still on track.

As well, there's an activist involved that will be pushing to unlock more value after the break up.

Alcoa (NYSE:AA) investors have experienced the ups and downs of the commodities industry firsthand. And even though the company's per-share price has fallen dramatically over the past year, there are many reasons for investors to believe Alcoa shares will bounce back sooner rather than later.

Let's not forget that Elliott Management went activist in November. The activist investor's thesis is that the market is undervaluing Alcoa's manufacturing business because of the metal price decline. The activist investor has been talking with the company about the spinoff and other options for boosting value. The big idea is that after the split, Elliott wants to see Alcoa sell off its power generation assets. Beyond just the catalyst of a spinoff and potential asset sales, there are other reasons to be bullish.

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