Slowly Scalping Aluminum in China for 9.90%

For all the talk about BRIC, and demand for metals, China was a net exporter of steel last year according to Barrons this week. What this says for world supply and demand (prices) will have us all watching the tape as the Chinese "B shares" market climbs and climbs.

Meanwhile, the Aluminum Corporation of China (or "Chalco" as it's called in China) symbol: ACH, quietly kicks out more than 9%, while trading at a P/E of less than 3 as an American Depository Receipt on the NYSE, which certainly has the look of something TGTBT.

Chalco was listed on the NYSE in December of 2001 at just 17 dollars per share, making it the first Chinese company listed abroad, according the the People's Daily (see, here). Its market capitalization is about 1/10 of Alcoa at 3 billion, but double Kaiser.

Of course, it does trade well above its 200 day moving average, and has just popped 7%, which is price movement that lends itself to parabolic buyer's "premorse" to coin a phrase to describe the feeling one gets looking at some of these charts since April.

But that 2.47 P/E appears to offer room to breath. And there are a few other measures that stand out for ACH, apart from taking the top yielding spot. ACH is an industry leader for its:

• 5 year growth rate,


• this quarter's EPS Growth (year over year), and


• this quarter's revenue growth (year over year)

ACH looks good for a slow motion yield scalping where you collect more than 9 percent with a tight stop loss order to prevent the kind of blow back that eats into the price you paid to buy in. Some sap could surely suffer worse than getting paid 9% to wait with ACH. But it may be best to consider using one of those "good 'til cancelled", "trailing stop loss" orders that the E-Brokers all offer to limit possible losses in the event that Barrons' editor is correct, and a glut in basic materials kicks in to erode prices and the value of a bet on ACH shares while you are out that wine tasting or cooking class at the community college, or maybe upgrading your half bathroom for the UPS driver, near your front door. Have a look, it's okay to use a fork.