Aluminum is one of the most used metal commodities in the world. It makes up kitchen utensils, window frames, aircraft parts and much more.
Russia, one of the biggest aluminum exporters, shipped $7.9 billion of the metal abroad in 2021.
But its recent invasion of Ukraine put a crimp on Russian exports. Countries now have to find other providers of this important metal.
The United Kingdom increased its tariffs on Russian aluminum imports, and Australia banned sending aluminum ores to Russia — heightening an already serious supply issue.
The world consumed 64.2 million metric tons of aluminum last year.
The chart above shows the global appetite for aluminum will grow to 78.4 million metric tons by 2029 — a 22% increase.
Companies that produce this commodity stand to make huge profits for themselves and for smart investors who recognize this trend now.
The Power Stock I'm excited to present to you today is Norsk Hydro ASA (OTC: NHYDY).
Norsk Hydro is a Norwegian company that produces, refines, smelts, remelts and recycles aluminum.
The company also works with partners to develop renewable energy projects, specifically battery recycling, wind and hydrogen.
NHYDY scores a “Strong Bullish” 96 out of 100 on our Stock Power Ratings system, and we expect it to crush the broader market by 3X in the next 12 months.
NHYDY Stock: Fantastic Value + Strong Momentum
The stock stands out to me for two notable reasons:
- In 2021, Norsk Hydro increased its total annual revenue from $13 billion to $17.1 billion — a 9% increase compared with the same period last year.
- The United States, European Union and United Kingdom are increasing or have increased tariffs on Russian aluminum, shining a spotlight on companies outside of Russia to meet global demand.
Value and growth make NHYDY an attractive stock.
Norsk’s one-year annual earnings-per-share (EPS) growth rate is 615.9%, and its one-year annual sales growth rate is 38%. That means it’s grown its sales base and its net profits per share.
NHYDY is up 59.5% over the last 12 months. The average price growth of the metal products industry over the same time was 50%.
The stock now trades above its 50-day simple moving average — a bullish sign.
While it scores in the green in five of our six metrics, its $19.8 billion market cap makes it a large-cap stock. However, it’s a far cry from a $200 billion megacap, so it has plenty of room to grow. And the larger size likely contributes to its solid volatility rating. At 87, NHYDY is among the 13% least volatile stocks our system rates!
Norsk Hydro ASA stock scores a 96 overall — it’s in the top 4% of all the stocks in our universe.
That also means we’re “Strong Bullish” and expect it to beat the broader market by at least three times in the next 12 months.
In addition to its strong growth and value, NHYDY is a tremendous quality play with a return on equity of 15.4% and a gross margin of 25% — both higher than the industry averages.
Stay Tuned: Media Co. With Promising Tech
Remember: We publish Stock Power Daily five days a week to give you access to the top companies that our proprietary Stock Power Ratings identify!
Stay tuned for the next issue, where I’ll share all the details on a must-buy media company.
Matt Clark, CMSA®
Research Analyst, Money & Markets