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Strike While the Iron is Hot; Rio Tinto Bids $38 Bln for Alcoa By John Lee
July 12, 2007 11:00 AM ET
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Rio Tinto (RTP | charts | news | PowerRating) announced on Thursday it has reached an agreement
to buy aluminum producer Alcan (AL | charts | news | PowerRating) for $38.1 billion. Rio Tinto's bid
bested rival Alcoa's (AA | charts | news | PowerRating) offer of $28 billion.
Alcoa and Alcan are both components of the Aluminum industry; Alcoa's
proposed takeover plan was known to be hostile in nature. On the other hand, Rio
Tinto is in the Steel & Iron industry, so Rio is trying to grow business
in a new area, as opposed to taking out a rival competitor. At any rate, the
entire metals and mining sectors are jumping today on the major M&A news.
Aluminum has a PowerRating (for Industries) of 6. From 1996-2006
industries with a PowerRating (for Industries) of 6 have achieved annualized
returns of 15.15% based on 3-month historical returns. Steel & Iron has a
PowerRating (for Industries) of 8, which have had annualized returns of 20.26%.
By contrast, industries with a PowerRating of 10
have an annualized
return of 35.27% based on 3-month historical returns.
With big M&A action hitting the newswires in the entire metals and mining
section, keep an eye out on the big movers for opportunities.
Here are some of the biggest names from both of these sectors.
|
Stock |
Industry |
% Gain 2007 |
PowerRating |
| Rio Tinto |
Steel & Iron |
+47% |
7 |
| Arcelor Mittal |
Steel & Iron |
+60% |
7 |
| Alcan |
Aluminum |
+105% |
5 |
| Alcoa |
Aluminum |
+52% |
8 |
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