Century Story

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CENX -- USA Stock  

USD 16.19  0.09  0.56%

It looks like Kaiser Aluminum will continue to recover much faster as its share price surged up 5.25% today to Century Aluminum's 17.4271%. As many millenniums are getting more into basic materials space, we are going to break down Century Aluminum and Kaiser Aluminum as potential short-horizon trade. We are going to inspect some of the competitive aspects of both Century and Kaiser.
Published over two weeks ago
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What should I take up Kaiser (NASDAQ:KALU) or Century (NASDAQ:CENX)?
By analyzing existing basic indicators between Century Aluminum and Kaiser, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Kaiser with a short position in Century Aluminum. Check out our pair correlation module for more information.

Let's begin by analyzing the assets.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Century Aluminum has an asset utilization ratio of 91.87 percent. This suggests that the company is making $0.92 for each dollar of assets. An increasing asset utilization means that Century Aluminum C is more efficient with each dollar of assets it utilizes for everyday operations.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Century or Noranda is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Century Aluminum's Liquidity

Century Aluminum financial leverage refers to using borrowed capital as a funding source to finance Century Aluminum C ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Century Aluminum financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Century Aluminum's total debt and its cash.

Correlation Between Century and Noranda Aluminum Holding

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Century Aluminum together with similar or unrelated positions with a negative correlation. For example, you can also add Noranda Aluminum to your portfolio. If Noranda Aluminum is not perfectly correlated to Century Aluminum it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Century Aluminum for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Please check pair correlation details between CENX and NORNQ for more information.

Note

Are you currently holding both Century Aluminum and Noranda Aluminum in your portfolio?
Please note if you are using this as a pair-trade strategy between Century Aluminum and Noranda Aluminum, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Conversion by Glencore Ag of 137 shares of Century Aluminum

Legal trades by Century Aluminum insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Century insider trading alert for conversion of series a convertible preferred stock by Glencore Ag, the corporate stakeholder, on 1st of April 2021. This event was filed by Century Aluminum Co with SEC on 2021-04-01. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down a bit more

Revenue is income that a firm generates from business activities such us rendering services or selling goods to customers. It is a crucial part of a business and an essential item when evaluating a company's financial statements. Revenues from a firm's primary business operations can be reported on the income statement as sales revenue, net sales, or simply sales, depending on the industry in which a given company operates.
Revenue is typically recorded when cash or cash equivalents are exchanged for services or goods and can include product or services discounts, promotions, as well as early payments on invoices or services rendered in advance.

Revenue Breakdown

Lets now check Century Aluminum revenue. Based on the latest financial disclosure, Century Aluminum C reported 1.61 B of revenue. This is 79.51% lower than that of the Basic Materials sector and 85.98% lower than that of the Aluminum industry. The revenue for all United States stocks is 82.94% higher than that of the firm. As for Kaiser Aluminum we see revenue of 1.17 B, which is 89.81% lower than that of the Aluminum

Century1.61 Billion
Sector7.86 Billion
Kaiser1.17 Billion
1.6 B
Century
7.9 B
Sector
Kaiser

Century Aluminum implied volatility may change after the rise

The variance is down to 30.48 as of today. Century Aluminum C exhibits above-average semi-deviation for your current time horizon. We encourage investors to investigate Century Aluminum C individually to make sure intended market timing strategies and available technical indicagtors are consistent with their estimates about Century Aluminum future systematic risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Century Aluminum's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Century Aluminum's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Conclusion on Century Aluminum

While some companies within the aluminum industry are still a little expensive, even after the recent corrections, Century Aluminum may offer a potential longer-term growth to investors. On the whole, as of the 26th of March 2021, our analysis shows that Century Aluminum hyperactively responds to market trends. The company is overvalued and projects below average chance of distress for the next 2 years. Our primary 30 days 'Buy-vs-Sell' recommendation on the company is Cautious Hold.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Century Aluminum C. Please refer to our Terms of Use for any information regarding our disclosure principles.

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