Trading Strategy (Alcoa)
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Transcript of Trading Strategy (Alcoa)
Value Investing
Stock to Watch:Alcoa Inc.NYSE:AA
3th of October 2013
Copyright ©Akin Yalcin, MSc.
0.Contents
- 1. Intro: What is value investing?- 2. Fundamental analysis- 3. Technical analysis- 4. Conclusion
1.What is Value Investing?
• Value investing involves buying stocks that are out-of-favor in the market due to investor irrationality.
• This irrationality, in the extreme, can often push a stock’s price well below its true value.
• A shrewd value investor seeks to determine the true value of such stocks, thus taking advantage of this type of investor irrationality.
(Source: grahaminvestor.com)
1.What is Value Investing? (2)
• Typically, value investors select stocks with lower-than-average:
- price-to-book ratio - price-to-earnings ratio - high dividend yields
(Source: Investopedia.com)
2.Fundamental AnalysisCompany Profile
2.Fundamental Analysis (2)
Comment: Relatively competitive fundamentals in comparison to industry peers
Key Fundamentals
2.Fundamental Analysis (3)Industry Peers
3. Technical Analysis10 Year Total Return Performance
3. Technical Analysis (2)Time Period: 2001-2013
3. Technical Analysis (3)5 Year Time Period
3. Technical Analysis (4)2 Year Time Period
4. Conclusion
• Stock to Watch: “Alcoa Inc.”• Relatively competitive fundamentals • Technical analysis: Fair value: +/- $13-14 • Hence: Short-term strategy: Buy $7.75-8.00 Sell $8.75-9.50 Long-term strategy: Buy $7.75-8.00 Sell $13.00-14.00