AWC has been a standout silent achiever over the last 6-months, more than doubling from its November low. Alumina producer AWC had previously endured an awful five years, but strength emerged as the sanctions against Russia took hold. China is the largest Alumina consumer, taking ~40% of the supply. Hence, further signs that the world’s second-largest economy is improving should add an additional tailwind to the metal and related stocks. The stock is under takeover from their investment partner Alcoa (AA US). Alumina shareholders are set to receive 0.02854 AA US shares for each AWC held, which is currently worth ~$1.62/sh. The deal is now binding and is expected to be implemented next quarter, at which point Alcoa shares will trade as CDIs on the ASX.
- We believe the move and resulting bid for AWC illustrates the increasing appetite for the sector.
MM is bullish toward AWC medium term
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