5 Rallying Stocks Under $10 Well Positioned For A 2013 Bull Run
Fundamentally, ALU has several positives. The company's EPS is expected to grow by 55.60% next year. ALU is trading for approximately 88% of book value. The company has $2.68 in cash per share. Book value per share is $1.93. The cash flow situation was greatly improved by the recent debt deal.
Technically, ALU has made it back to where it took a major dive in July of 2012. The stock floundered around the $1 mark for several months prior to breaking out in mid-December. This will be a major resistance test as shareholders may sell now that they have been made whole.
The proliferation in spending by major telecom companies, a major contract win and receiving a loan to boost liquidity are the major catalysts propelling ALU shares higher. Nevertheless, it is a competitive world out there. Risks that new technologies will be developed to supplant those of ALU are always on the horizon. Furthermore, at some point you have to start making money. ALU ha a net profit margin of -1.12%. If the company cannot get its house in order and turn a profit it cannot continue as a going concern.
ALU is taking the proper steps to return the company to profitability and the prospect of the EU taking action to shore up the competitive market bodes well for the stock. I would like to see the stock break out above the $165 mark and hold that level for a few days or pullback somewhat prior to starting a position. The stock is at an inflection point.