One such company is Alumina Limited (NYSE ADR: AWC), an Australian aluminum company.
Alumina, which mines and refines aluminum, operates eight refineries and two aluminum smelters and owns or has interest in seven mining operations. It has a shipping operation that transports aluminum-related raw materials.
Alumina has a 40% stake in a joint venture with Alcoa (NYSE: AA), Alcoa World Alumina. Aluminum prices have been falling in the face of weak global demand, and inventories have piled up over the past couple of years. But as excess inventory is pared down, aluminum companies are stocks to buy now. These companies will see their bottom line and stock price increase fairly rapidly.
Along with other global aluminum producers, Alumina has been reducing capacity and lowering its cost structure by closing unprofitable facilities.
The company also sold stock earlier this year and used the proceeds to pay down debt levels and reduce interest expense. This reduced cost structure will add to the company's earnings growth potential when the markets do recover.
The few analysts who watch Alumina estimate that earnings should average gains of 15% annually over the next five years - but its stock could soar much higher.
Now Alumina stock is trading at 90% of book value, so the growth potential does not appear to be reflected in the current stock price. Alumina looks like a bargain stock that could easily double over the next five years.
Zess hope its lot sooner than that $$$$$$$$$$$$$$$$
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