Alumina (AWC) owns a 40% stake in the bauxite and alumina operations of the global mining group Alcoa (AA US), the US-based miner has fallen over 65% from its 2022 high which explains why AWC has endured a tough few years. AWC is certainly one of those stocks that keeps getting weaker with it unfortunately becoming a yield trap for many investors i.e. a forecast yield over the next 12 months close to 8% is not useful if the stock falls by 20%. Earlier in the year US joint venture partner Alcoa reported higher costs and lower prices, not a good combination that feeds into contracting margins.
- We see no reason to chase AWC under $1.40 when we see better alternatives elsewhere in today’s volatile Resources Sector.
MM has no interest in AWC around $1.40
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