Alcoa Inc. (NYSE:AA) stock has received a major boost in the market after the publisher of the Gartman Letter, Dennis Gartman, emphasized his belief on the company posting better earnings for the current quarter in an interview on CNBC news. Mr. Gartman remains bullish on Alcoa numbers that he expects to be positive. Contrary to the fact that the company did not do so well same quarter last year, Gartman considers all is set to change this year.
“Last year they lost money, this quarter this year, they are going to make quite a good deal of money,” said Mr. Gartman on Alcoa Inc. (NYSE:AA) prospects.
Mr. Gartman believes that the company is all but set to post good earnings for the quarter at the back of increased demand for aluminum in the automobile sector.
Aluminum demand has been gaining momentum in the recent past in line with environmental protection regulators mandating that vehicles being manufactured to use four gallons a mile in order to reduce environmental pollution. These set of requirements essentially requires vehicles to be lighter of which aluminum is now being used for the manufacture of most of this vehicles.
When asked on whether Alcoa Inc. (NYSE:AA) will report double-digit earnings, Mr. Gartman responded by saying: “No that is not going to happen, you are not going to get double-digit earnings you are going to get solid earnings, you are going to get impressive earnings.”
Taking into consideration that the economy is doing much better won’t guarantee double-digit earnings for Alcoa, according to Mr. Gartman.
The U.S economy has been picking slowly in the recent past seen by improved employment numbers as well as levels of unemployment dropping to 6.1%. Mr. Gartman emphasizes that anticipating double-digit growth for Alcoa Inc. (NYSE:AA) will be misadvised and would result in utter disappointment. Mr. Gartman remains bullish on Alcoa posting impressive results on the basis that businesses in the U.S are doing okay, real estate industry is picking up, and retail sales continue to improve.