Alcoa a Bright Spot in Dow's Horizontal Day


Though the Dow Jones Industrial Average fell slightly for a second straight day, several catalysts prevented the index from a more dramatic drop, including encouraging jobs data, and one big announcement from one of the world's most famous and successful investors. The Dow ended down nine points, or less than 0.1%, to close at 13,973.

Coca-Cola didn't offer much help to the blue chips, losing 1%, to go down as the worst performer in the 30-stock index Thursday. Investors may have been dismayed with the fact that PepsiCo, Coke's sworn enemy, reported quarterly earnings and revenue that exceeded expectations. It doesn't look good for Pepsi to be thriving just after Coke investors sold off the stock to the tune of nearly 3% Tuesday after its own unimpressive results.

Aluminum producer Alcoa , on the other hand, helped minimize the Dow's losses, as shares added 2.1%. Trading lower than it did one-, three-, and five-years ago, the market recognized some of Alcoa's hidden potential today, taking a cue from -- of all places -- China. A government-owned Chinese enterprise took a material stake in an Australian company called Alumina; Alumina happens to be a major co-investor in a venture with Alcoa.

More big news in the marketplace came today when H.J. Heinz rocketed nearly 20% higher on reports that famed investor Warren Buffett's Berkshire Hathaway will team with a private investor group to buy out the condiment conglomerate in a $28 billion transaction. Buffett is also a major holder of Coca-Cola stock.

Lastly, today brought bad vibes for telecom companies, as a patent trolling -- I mean, holding company, Intellectual Ventures, filed a patent infringement suit against a handful of major providers. Windstream caught the brunt of the selling assault, plummeting 7.4%. The stock's 27% decline in the last year has driven Windstream's dividend above 10%. Investors will get a better idea of how sustainable that payout is on Tuesday, when the company releases its quarterly results.

Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Representing 14.7% of 2011 global production in this high-consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160B by 2017. Based on this prospective, 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 to get started.

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Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool recommends Berkshire Hathaway, Coca-Cola, H.J. Heinz Company, and PepsiCo. The Motley Fool owns shares of Berkshire Hathaway and PepsiCo. 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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