Is There Still A Trade In Aluminum?

Alcoa AA kicked off earnings season yesterday by reporting its Q4 results. EPS was $.21 while sales come in light at $5.65 billion (Estimates were $5.71 billion). Alcoa said on the conference call that higher energy and raw material costs as well as a weaker dollar contributed to the dismal results. Other aluminum manufacturing companies such as Century Aluminum CENX, Kaiser Aluminum KALU and Alumina Limited AWC I would expect to have similar results as the industry as a whole felt the weaker doller and higher input costs. There's no way to get around those externalities. Guidance will be key for these companies as the economy looks to turn around in 2011. Look for aluminum demand to pick up as manufacturing increases as well as the increasing production of automobiles. Would I be a buyer of any of the aluminum companies ahead of earnings? Probably not, but the industry weakness could be potentially be a buying opportunity as the manufacturing industry continues to turn around. AA is trading lower at $16.22 CENX is trading at $16.55 AWC is trading 3 % lower at $9.66 KALU is trading higher at $48.84 Disclosure: No position in AA, CENX, AWC, KALU