3 things basically.
1) the cost cutting. It's not often you get the insight into a company to KNOW..up front..what a company is doing in terms of cutting costs. And knowing that about ALU I think provides someone some VERY good assurances that we at LEAST..have a 3.00 stock on our hands provided YOU have the patience to realize that in about a year from now's time.
2) their products. Supply and demand. We are NOT tied to the success of any company..whether it's apple or samsung or whomever. Nor any device..whether it's smartphones or tablets. We provide what they ALL need. And my testing is telling me this. Folks...networks are FALLING APART. Data is destroying them. And like it or not..carriers WILL spend to upgrade. Or they will cease to exist.
3) the current total valuation of this company. 3+ billion. with their cash position. This company is VERY undervalued given that..their name brands..their patents. This stock is CHEAP.
With this stock priced now at virtually what an option is...i think the potential here to at least double is enormous. Other catalysts now is a new CEO who will likely expand on those cost cuts.
I think the key here to this investment is to be aggressive about the potential for this to rise to 3.00 per share...and then more conservative about amounts beyond that. And my position is based exactly on that. I have a large position that WILL Be reduced when we're at the 3.00 level. but still..i'll be in this i'm sure well beyond that albeit at a more moderate level. 27% of my portfolio is in this stock now. And that's a lot..and a lot more than i normally go for a top hold which normally is 10 to 15%. I'm OK with that however because of a) my beliefs and my own DD....and b) I'm VERY diversified outside of that 27%. And, i think my goals are realistic..and very doable given what is happening.
I noted before..we have to get through Q 1 and 2 now. Both will be likely losses. but that's ok because i think the sun begins to shine again Q3/Q4.
Sentiment: Strong Buy
Agree with your point that ALU is undervalued based on cash position, brands and patents. Billionaire Steve Cohen, who recently added ALU to his portfolio uses the metric of price to sales which, for ALU is "0.2 x sales" which is incredibly cheap.
Sentiment: Strong Buy
You have been Bullish a Long time and sorry to say wrong...as well. I have a lot of Shares of ALU
and Think that management is doing everything possible to be successful. Its a struggle for ALU..
getting the Contracts vs,,,Pricing for better Higher Margins.........I liked Ben.....he did a lot of good things..but he failed in the most important thing...improving cash flow and margins
I am also heavily invested in ALU.I also believe that due to CAPEX spending,exiting unprofitable segments and territories(cost cutting and improving margins) that ALU will beat analyst's estimates every qtr.I do not believe it will take FYE 2014 to break even or be profitable as analysts project.ALU is an internationally recognized company in terms of R & D and innovation.I may be too optimistic but I believe ALU will be profitable within 5 qtrs or less.Should that be the situation,they could be worth one times sales(vs .2 time sales).Sales of @$19BB divided by 2.3BB shares outstanding can place this stock well above $5/share.Will it happen? Q1 2013 will give us an indication of the direction.Regardless,I am in this for the long haul and do realize mkts can be inefficient.Take advantage while you can.I would expect a good bump in the price after 4/2 and the Q1 report.Analysts have extremely conservative projections when a company has lost 90% of mkt cap since it's highly touted merger.Obviously this is still viewed as a speculative stock.I disagree.
Sentiment: Strong Buy
If ALU can beat estimates all year, then you are likely correct....the stock will move substantially higher....but probably still significantly below 3 dollars a share.
The QUALITY of earnings/reduced losses is also an important factor. They need a better balance sheet...markedly better margins, and improved free cash flow...and not accounting gimmicks.
It is impossible to put your finger on what it will actually take for ALU to finally restore confidence with investors. But because of their DISMAL performance in the past, no one is going to give ALU the benefit of the doubt. At some point (if it happens...still a BIG "IF"), there will come a time when ALU has finally built up enough credibility with investors, MORE THAN LIKELY THROUGH ACTUAL CORPORATE PERFORMANCE, to finally move the stock price up in a sustained way.
What would be bad would be any indication that Michel wants to act more aggressively than the BOD is willing to accept. This kind of CEO/BOD conflict is NOT what ALU needs. However, in the recent article about Michel's June introduction of his strategic plan, it was alluded to that their might be a difference of opinion with the BOD. It is early yet, very early, so I hope this assessment is not true.
I am especially concerned about the BOD trumping any restructuring decision of the new CEO, when the BOD has the credibility of a CRACK HOE. I mean, lets face it, the BOD approved Ben's FAILED vision for 5 painful years...so what the BOD thinks is, well, HIGHLY questionable.
Finally, ALU does not have the luxury of time. They need to act aggressively, and expansively, to cut their costs. It worked for NOK's NSN, and it will work for ALU. Cutting aggressively at this late juncture is a necessity born of desperation stemming from a bloated structure, a bad European economy, and low cost Chinese competition.
It is not good enough for ALU to simply "react" to their environment. They need to actually get ahead of the power curve.
Trade, you are a unique trader/investor and you are the only one I have encountered on a public message board that have the audacity and the time to post your thoughts, plans, etc. which supports your investments and you seem to be very articulate and eloquent. You have an open book investment lifestyle and I have yet to find someone that compares to you. You don’t seem to care what might people THINK of your investment.