Century Aluminum - search for beneficiaries of EV

[i4value]

I was told that electric vehicles (EV) uses more aluminum than the petroleum cars. So if EV goes main stream we would expect the demand for aluminum to rise as well. 

As such I have been studying aluminum companies to see whether there are investment opportunities.  Century Aluminum is the first one I looked at.

In the first place, I found that this was a cyclical sector



When I look at Century performance over the cycle, it did not look exciting. I could not find any discernable uptrends.



I will of course continue my search. If any of you know of other aluminum companies to dig further, do let me know. I have identified Arconic, Alcoa, Kaiser and Constellium so far.

[i4value]

Century Aluminum (CENX) is a global producer of primary aluminum. It operates 3 aluminum smelters in the United States and one in Iceland.

CENX revenue grew faster than the demand for aluminum. Together with a 2 PBV multiple, you could think that this is a growth stock. But it is not.

Revenue growth was partly due to the 2021/22 spike in commodity prices. But this is a sector with cyclical prices. The long-term aluminum price growth is only 1 % CAGR.

PAT had not grown over the past 12 years. Gross profit margins were volatile without discernible growth trends. Production had to be curtailed.

There are no fundamental reasons to support a growth picture. Also, a Greenwald Asset Value vs EPV analysis show that this is not a growth stock.