Jim Cramer’s Lightning Round: 7 Stocks to Watch

3. Alcoa Corporation (NYSE:AA)

Number of Hedge Fund Holders: 42

When asked about Alcoa Corporation (NYSE:AA), Cramer expressed worries about China with regard to material stocks.

“Now here’s the problem with Alcoa, in the end, it’s a material stock. The material stocks are linked with China and therefore nobody wants them, even though Alcoa had a great quarter. So I have to go with the crowd and say, not now.”

Alcoa (NYSE:AA) produces and sells bauxite, alumina, and aluminum products, while also operating hydropower plants that generate and sell electricity to various industrial and wholesale markets. Appearing on the Bloomberg: The China Show in November, Bill Oplinger, President and CEO discussed various aspects of the aluminum industry, including the current commodity market.

He explained that global aluminum demand remains strong, with tight supply across the system, particularly in bauxite and alumina. Oplinger noted that supply constraints from China, including a cap on aluminum production, contribute to the market’s tightness, with high prices for bauxite and alumina. He emphasized that the company’s global presence, with operations in nine countries, allows it to manage within existing tariff structures, particularly those related to U.S. steel and aluminum tariffs from the Trump administration.

On inorganic growth, Oplinger highlighted the recent acquisition of Alumina Limited and a transaction in Saudi Arabia as part of the company’s growth strategy, which remains focused on the aluminum supply chain from mining to smelting. He said that Alcoa (NYSE:AA) is not looking to diversify into other metals but continues to focus on improving operations and reducing costs within the aluminum market. Finally, Oplinger stressed that the company’s geographic diversification, with assets spread across Australia, Africa, and Brazil, provides a competitive advantage in the face of geopolitical risks and supply chain challenges.