CENX Stock

Not alot of change in the ending price of CENX from Friday, Nov 20th (closed at $9.89) to Friday, Nov 27th (closed at $9.74)...down 1.5%. However, as the article below states, with the rise in Europe & Asia aluminum premiums, N. American firms (like Century) should see increased demand in overseas markets. Read the full article at http://metals.about.com/gi/dynamic/offsite.htm?site=http://www.amm.com/

If the increase remains, I believe the stock price for CENX should see some spikes very shortly...but as a disclaimer, I would like to say don't bet the farm on my presumption.

Century Culture

Per Century Aluminum's online brochure, the company's culture is as follows:
-entrepreneurial, flexible structure and operating styel
-quick decision making
-emphasis on creativity
-partnership spirit - with our colleagues inside and outside the company
-honest, ethical business dealings...highest respect for health, safety, and environment
-broad international experience
http://www.centuryaluminum.com/images/CABro.pdf

CENX Amends Indenture of Debt

On Friday, November 13, CENX announced it was successful in completing the solicitation of consents to amend the indenture governing a portion of the company's notes to modify certain events of default relating to certain bankruptcies and insolvencies.

I have seen this in recent filings, and even in the company I work for, where the state of the economy has left many companies nearing defaults on covenants. The need for more "relaxed" covenants is growing and growing as the economy has still not fully recovered.

Allocation of Resources

As stated in Century's 10-Q filing, their Helguvik project's cost, scope and schedule is currently being evaluated. Spending has significantly been reduced and cannot be certain when or if it will restart major construction and engineering activities or even complete the project.

This relates to building capacity in Iceland to take advantage of reduced operating expenses related to heating/energy costs. If the decision is made to discontinue the project...the company has already spent through 2008...$83 million and projected spending for 2009 is in the range of $25-$30 million...that would be a very difficult decision to make, but I guess if managment doesn't see benefits panning out, it is best to exit.

Quarterly Report Filed

On Monday, Nov 9, Century filed their quarterly report. Noted in the quarterly report was the commencement of an exchange offer that occurred on Oct 28, which they issued 11,365,693 shares of C/S in exchange for $127.9 million debt. Net income for the quarter was reported at $40.1 million, on sales of $228.7 million...net income was a result of a $57 million gain associated with the exit of their long-term power contract at the Hawesville plant. Even though this wasn't anything new, CENX stock ended on a good note...closing at $9.48 after closing the prior week at $8.99 (5.5%). The increase was more than likely not related to the filing of the Q, but due to market conditions, Alcoa also closed Monday on a high note at $13.34 after closing the prior week at $12.89 (3.5%).

Stock Outlook

According to a recent article on "The Motley Fool", you would be a dope to buy CENX stock right now. The full article can be read at http://www.fool.com/investing/small-cap/2009/11/03/youd-be-stupid-to-buy-these-stocks.aspx.... based on the fact the stock has risen more than 500% since March.

Personnally, I think this is nonsense. Just because a stock has increased as much as CENX since the market downfall, does not deem investors as dopes if they are currently purchasing...it simply means, they decided to buy at a less opportune time compared to the lows that were recorded in March. The potential of this stock (seeing that highs have surpassed the $80/share mark in the past) could mean large gains for these late investors.

CENX Stock Movement

Today, Tuesday November 3rd, CENX is currently trading at $8.50. Last week, the stock opened at $10.35, reached a high of $10.74 and closed the week at $8.67. I believe the fluctuations are linked to a couple of items 1) stock prices rose after earnings reported by Alcoa, which beat expected results, 2) then prices fell once CENX reported quarterly results. Even though the quarter results showed a positive net income, this was entirely due to adjustments related to gains on termination of power contract (after-tax benefit $55.6 million).

I still believe this stock is trading at a bargain rate, and think that once the economy fully recovers, this stock will again exceed market leader Alcoa.