In this video, Taylor Muckerman highlights his reasons to sell Alcoa . First, the company has little exposure to emerging markets. This means that Alcoa's growth potential is limited to the world's largest economies which tend not to grow as fast as emerging economies. Second, Alcoa faces increased competition from Chinese aluminum producers, which means that China is meeting its domestic needs but also exporting aluminum. Third, there is a worldwide surplus of aluminum that is constraining prices and profit margins.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here now to get started.


The article 3 Reasons to Sell Alcoa originally appeared on Fool.com.

Taylor Muckerman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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