Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin5.9%
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin9.0%
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Financial Health
C
Years to Pay Off Debt2.3 yrs
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt-$770M
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital$1.7B
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Valuation
F
Margin of Safety6.6%
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book1.93x
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Cash Flow
C
Free Cash Flow$567M
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income53.4%
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings$2.4B
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
About Alcoa Corporation
Alcoa Corporation, together with its subsidiaries, engages in the bauxite mining, alumina refining, aluminum production, and energy generation business in Australia, Brazil, Canada, Iceland, Norway, Spain, the United States, and internationally. The company operates through two segments: Alumina and Aluminum. It operates bauxite and other aluminous ores mining and processes bauxite into alumina for sale to aluminum smelter customers and customers who process it into industrial chemical products through supply contracts to third parties, as well as aluminum smelting and casting businesses. The company also offers aluminium powder and scrap and primary aluminum in the form of commodity grade ingot and value-add ingot to customers that produce products for transportation, building and construction, packaging, wire, and other industrial markets. In addition, it provides energy that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in May 2016. The company was founded in 1886 and is headquartered in Pittsburgh, Pennsylvania.
Alcoa Corporation, together with its subsidiaries, engages in the bauxite mining, alumina refining, aluminum production, and energy generation business in Australia, Brazil, Canada, Iceland, Norway, Spain, the United States, and internationally. The company operates through two segments: Alumina and Aluminum. It operates bauxite and other aluminous ores mining and processes bauxite into alumina for sale to aluminum smelter customers and customers who process it into industrial chemical products through supply contracts to third parties, as well as aluminum smelting and casting businesses. The company also offers aluminium powder and scrap and primary aluminum in the form of commodity grade ingot and value-add ingot to customers that produce products for transportation, building and construction, packaging, wire, and other industrial markets. In addition, it provides energy that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in May 2016. The company was founded in 1886 and is headquartered in Pittsburgh, Pennsylvania.
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Margin of Safety
How far below the Graham Number the stock trades. Graham required a 33% discount as a buffer against analytical error. However, the Graham Number itself assumes 1960s-era P/E and P/B norms — for modern asset-light businesses it often understates true intrinsic value, making 0% MoS appear misleadingly bad.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies like software and consumer brands.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
CapEx % of Net Income
Capital expenditure as a share of net income. Low CapEx signals a capital-light business that doesn't need heavy reinvestment to sustain earnings — Buffett's ideal. High CapEx is structurally necessary in manufacturing, airlines, telecoms, and semiconductors. For these industries, a high reading reflects the business model, not poor management.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Mr. Market is currently offering Alcoa Corporation at $44.84.
The business passes 4 of 7 of Graham's defensive criteria — adequate but not exceptional.
At $44.84, the stock trades below its Graham Number of $48.02 — suggesting a margin of safety exists.
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign..
Conclusion: This stock is better suited for Graham's Enterprising investor — one willing to devote time and skill to security selection.
Showing Key Metrics
Income Highlights
Metric
2025
2024
2023
2022
2021
Gross Profit %
16.9%▲
15.6%▲
7.0%▼
18.0%•
N/A
Operating Margin %
5.9%▼
7.0%▲
-2.2%▼
10.7%•
N/A
Net Income %
9.0%▲
0.5%▲
-6.2%▼
-1.0%•
N/A
Diluted EPS
4.42▲
0.26▲
-3.65▼
-0.57•
N/A
Balance Sheet Highlights
Metric
2025
2024
2023
2022
2021
Total Assets
$16.1B
$14.1B
$14.2B
$14.8B
N/A
Total Debt
$2.7B▼
$2.8B▲
$2.0B▲
$1.9B•
N/A
Working Capital
$1.7B▲
$1.5B▲
$1.4B▼
$2.2B•
N/A
Years to Pay Debt
2.34
46.97
-3.03
-15.17
N/A
Cash Flow Highlights
Metric
2025
2024
2023
2022
2021
Free Cash Flow
$567M▲
$42M▲
-$440M▼
$342M•
N/A
Owner Earnings
$2.4B
$1.3B
$512M
$974M
N/A
CapEx % of Net Income
53.4%
966.7%
N/A
N/A
N/A
Income Statement
2025
2024
2023
2022
2021
Tax Effect Of Unusual Items
98,490
-83,370
-14,910
-102,060
Tax Rate For Calcs
0
0
0
0
Normalized EBITDA
1,376,000
1,484,000
226,000
1,911,000
Total Unusual Items
469,000
-397,000
-71,000
-486,000
Total Unusual Items Excluding Goodwill
469,000
-397,000
-71,000
-486,000
Net Income From Continuing Operation Net Minority Interest
1,157,000
60,000
-651,000
-123,000
Reconciled Depreciation
623,000
642,000
632,000
617,000
Reconciled Cost Of Revenue
10,658,000
10,044,000
9,813,000
10,212,000
EBITDA
1,845,000
1,087,000
155,000
1,425,000
EBIT
1,222,000
445,000
-477,000
808,000
Net Interest Income
-158,000
-156,000
-107,000
-106,000
Interest Expense
158,000
156,000
107,000
106,000
Normalized Income
786,490
373,630
-594,910
260,940
Net Income From Continuing And Discontinued Operation
1,157,000
60,000
-651,000
-123,000
Total Expenses
12,073,000
11,067,000
10,778,000
11,120,000
Diluted Average Shares
261,202
214,051
178,311
180,645
Basic Average Shares
259,378
212,421
178,311
180,645
Diluted EPS
0
0
0
0
Basic EPS
0
0
0
0
Diluted NI Availto Com Stockholders
1,157,000
60,000
-651,000
-123,000
Net Income Common Stockholders
1,157,000
60,000
-651,000
-123,000
Net Income
1,157,000
60,000
-651,000
-123,000
Minority Interests
38,000
36,000
122,000
-161,000
Net Income Including Noncontrolling Interests
1,119,000
24,000
-773,000
38,000
Net Income Continuous Operations
1,119,000
24,000
-773,000
38,000
Tax Provision
-55,000
265,000
189,000
664,000
Pretax Income
1,064,000
289,000
-584,000
702,000
Other Income Expense
464,000
-383,000
-250,000
-523,000
Other Non Operating Income Expenses
53,000
38,000
49,000
-10,000
Special Income Charges
-598,000
-329,000
-130,000
-651,000
Gain On Sale Of Ppe
-5,000
-37,000
-14,000
-10,000
Gain On Sale Of Business
0
0
-79,000
0
Other Special Charges
36,000
-7,000
82,000
Write Off
340,000
5,000
50,000
58,000
Impairment Of Capital Assets
144,000
0
0
Restructuring And Mergern Acquisition
109,000
287,000
66,000
504,000
Earnings From Equity Interest
-58,000
-24,000
-228,000
-27,000
Gain On Sale Of Security
1,067,000
-68,000
59,000
165,000
Net Non Operating Interest Income Expense
-158,000
-156,000
-107,000
-106,000
Interest Expense Non Operating
158,000
156,000
107,000
106,000
Operating Income
758,000
828,000
-227,000
1,331,000
Operating Expense
1,415,000
1,023,000
965,000
908,000
Other Operating Expenses
469,000
49,000
68,000
55,000
Depreciation Amortization Depletion Income Statement
623,000
642,000
632,000
617,000
Depreciation And Amortization In Income Statement
632,000
617,000
664,000
Research And Development
24,000
57,000
39,000
32,000
Selling General And Administration
299,000
275,000
226,000
204,000
Gross Profit
2,173,000
1,851,000
738,000
2,239,000
Cost Of Revenue
10,658,000
10,044,000
9,813,000
10,212,000
Total Revenue
12,831,000
11,895,000
10,551,000
12,451,000
Operating Revenue
12,831,000
11,895,000
10,551,000
12,451,000
Balance Sheet
2025
2024
2023
2022
2021
Ordinary Shares Number
263,102
258,361
178,472
176,969
Share Issued
263,102
258,361
178,472
176,969
Net Debt
851,000
1,457,000
923,000
444,000
Total Debt
2,707,000
2,818,000
1,971,000
1,866,000
Tangible Book Value
6,084,000
4,979,000
4,068,000
4,902,000
Invested Capital
8,566,000
7,752,000
6,118,000
6,883,000
Working Capital
1,668,000
1,519,000
1,375,000
2,246,000
Net Tangible Assets
6,084,000
4,979,000
4,068,000
4,902,000
Capital Lease Obligations
259,000
223,000
104,000
59,000
Common Stock Equity
6,118,000
5,157,000
4,251,000
5,076,000
Total Capitalization
8,556,000
7,627,000
5,983,000
6,882,000
Total Equity Gross Minority Interest
6,194,000
5,157,000
5,845,000
6,589,000
Minority Interest
76,000
0
1,594,000
1,513,000
Stockholders Equity
6,118,000
5,157,000
4,251,000
5,076,000
Gains Losses Not Affecting Retained Earnings
-5,189,000
-5,110,000
-3,645,000
-3,539,000
Other Equity Adjustments
-5,189,000
-5,110,000
-3,645,000
-3,539,000
Retained Earnings
-271,000
-1,323,000
-1,293,000
-570,000
Additional Paid In Capital
11,575,000
11,587,000
9,187,000
9,183,000
Capital Stock
3,000
3,000
2,000
2,000
Common Stock
3,000
3,000
2,000
2,000
Total Liabilities Net Minority Interest
9,935,000
8,907,000
8,310,000
8,167,000
Total Non Current Liabilities Net Minority Interest
6,134,000
5,512,000
5,280,000
5,163,000
Other Non Current Liabilities
35,000
50,000
36,000
39,000
Derivative Product Liabilities
1,134,000
836,000
1,092,000
1,026,000
Employee Benefits
785,000
763,000
815,000
788,000
Non Current Pension And Other Postretirement Benefit Plans
684,000
668,000
721,000
693,000
Tradeand Other Payables Non Current
93,000
241,000
450,000
440,000
Non Current Deferred Liabilities
30,000
48,000
62,000
65,000
Non Current Deferred Revenue
4,000
12,000
20,000
28,000
Long Term Debt And Capital Lease Obligation
2,697,000
2,693,000
1,836,000
1,865,000
Long Term Capital Lease Obligation
259,000
223,000
104,000
59,000
Long Term Debt
2,438,000
2,470,000
1,732,000
1,806,000
Long Term Provisions
1,360,000
881,000
989,000
940,000
Current Liabilities
3,801,000
3,395,000
3,030,000
3,004,000
Other Current Liabilities
1,176,000
1,001,000
736,000
681,000
Current Debt And Capital Lease Obligation
10,000
125,000
135,000
1,000
Current Debt
10,000
125,000
135,000
1,000
Other Current Borrowings
10,000
125,000
135,000
1,000
Pensionand Other Post Retirement Benefit Plans Current
383,000
362,000
357,000
335,000
Payables And Accrued Expenses
2,232,000
1,907,000
1,802,000
1,987,000
Payables
2,232,000
1,907,000
1,802,000
1,987,000
Total Tax Payable
294,000
102,000
88,000
230,000
Accounts Payable
1,938,000
1,805,000
1,714,000
1,757,000
Total Assets
16,129,000
14,064,000
14,155,000
14,756,000
Total Non Current Assets
10,660,000
9,150,000
9,750,000
9,506,000
Other Non Current Assets
185,000
154,000
166,000
150,000
Defined Pension Benefit
131,000
128,000
125,000
146,000
Non Current Prepaid Assets
441,000
569,000
653,000
668,000
Non Current Deferred Assets
927,000
468,000
520,000
457,000
Non Current Deferred Taxes Assets
687,000
284,000
333,000
296,000
Non Current Accounts Receivable
334,000
284,000
336,000
294,000
Financial Assets
34,000
0
3,000
2,000
Investments And Advances
1,874,000
980,000
979,000
1,122,000
Other Investments
0
10,000
10,000
10,000
Investmentin Financial Assets
1,397,000
0
Available For Sale Securities
1,397,000
Long Term Equity Investment
477,000
970,000
969,000
1,112,000
Goodwill And Other Intangible Assets
34,000
178,000
183,000
174,000
Other Intangible Assets
34,000
36,000
37,000
29,000
Goodwill
0
142,000
146,000
145,000
Net PPE
6,700,000
6,389,000
6,785,000
6,493,000
Accumulated Depreciation
-13,837,000
-13,161,000
-13,596,000
-13,112,000
Gross PPE
20,537,000
19,550,000
20,381,000
19,605,000
Construction In Progress
908,000
612,000
569,000
520,000
Other Properties
8,008,000
7,628,000
8,096,000
7,480,000
Machinery Furniture Equipment
11,374,000
11,077,000
11,459,000
11,352,000
Land And Improvements
247,000
233,000
257,000
253,000
Current Assets
5,469,000
4,914,000
4,405,000
5,250,000
Other Current Assets
378,000
514,000
466,000
417,000
Hedging Assets Current
49,000
25,000
29,000
134,000
Prepaid Assets
358,000
Inventory
2,177,000
1,998,000
2,158,000
2,427,000
Other Inventories
580,000
551,000
586,000
584,000
Finished Goods
394,000
406,000
355,000
385,000
Work In Process
282,000
251,000
287,000
350,000
Raw Materials
921,000
790,000
930,000
1,108,000
Receivables
1,268,000
1,239,000
808,000
909,000
Other Receivables
204,000
143,000
152,000
131,000
Accounts Receivable
1,064,000
1,096,000
656,000
778,000
Cash Cash Equivalents And Short Term Investments
1,597,000
1,138,000
944,000
1,363,000
Cash And Cash Equivalents
1,597,000
1,138,000
944,000
1,363,000
Cash Flow
2025
2024
2023
2022
2021
Free Cash Flow
567,000
42,000
-440,000
342,000
Repurchase Of Capital Stock
0
0
-500,000
-150,000
Repayment Of Debt
-1,213,000
-679,000
-72,000
-1,000
Issuance Of Debt
1,049,000
1,032,000
127,000
4,000
Capital Expenditure
-618,000
-580,000
-531,000
-480,000
Interest Paid Supplemental Data
128,000
132,000
100,000
100,000
Income Tax Paid Supplemental Data
167,000
157,000
319,000
504,000
End Cash Position
1,692,000
1,234,000
1,047,000
1,474,000
Beginning Cash Position
1,234,000
1,047,000
1,474,000
1,924,000
Effect Of Exchange Rate Changes
36,000
-28,000
10,000
-9,000
Changes In Cash
422,000
215,000
-437,000
-441,000
Financing Cash Flow
-261,000
201,000
57,000
-768,000
Cash Flow From Continuing Financing Activities
-261,000
201,000
57,000
-768,000
Net Other Financing Charges
8,000
-62,000
73,000
-221,000
Proceeds From Stock Option Exercised
0
0
1,000
22,000
Cash Dividends Paid
-105,000
-90,000
-72,000
-72,000
Preferred Stock Dividend Paid
-1,000
-1,000
0
0
Common Stock Dividend Paid
-104,000
-89,000
-72,000
-72,000
Net Common Stock Issuance
0
0
-500,000
-150,000
Common Stock Payments
0
0
-500,000
-150,000
Net Issuance Payments Of Debt
-164,000
353,000
55,000
3,000
Net Long Term Debt Issuance
-164,000
353,000
55,000
3,000
Long Term Debt Payments
-1,213,000
-679,000
-72,000
-1,000
Long Term Debt Issuance
1,049,000
1,032,000
127,000
4,000
Investing Cash Flow
-502,000
-608,000
-585,000
-495,000
Cash Flow From Continuing Investing Activities
-502,000
-608,000
-585,000
-495,000
Net Other Investing Changes
14,000
9,000
16,000
7,000
Net Investment Purchase And Sale
102,000
-37,000
-70,000
-22,000
Sale Of Investment
161,000
0
0
10,000
Purchase Of Investment
-59,000
-37,000
-70,000
-32,000
Capital Expenditure Reported
-618,000
-580,000
-531,000
-480,000
Operating Cash Flow
1,185,000
622,000
91,000
822,000
Cash Flow From Continuing Operating Activities
1,185,000
622,000
91,000
822,000
Change In Working Capital
-456,000
-499,000
-270,000
-848,000
Change In Other Working Capital
-152,000
301,000
Change In Other Current Liabilities
-294,000
-162,000
-93,000
-63,000
Change In Other Current Assets
-107,000
-4,000
-210,000
-87,000
Change In Payables And Accrued Expense
-182,000
177,000
-353,000
-136,000
Change In Accrued Expense
-203,000
-108,000
-133,000
-173,000
Change In Payable
21,000
285,000
-220,000
37,000
Change In Account Payable
63,000
190,000
-74,000
189,000
Change In Tax Payable
-42,000
95,000
-146,000
-152,000
Change In Income Tax Payable
-42,000
95,000
-146,000
-152,000
Change In Prepaid Assets
113,000
-68,000
39,000
44,000
Change In Inventory
-57,000
51,000
243,000
-547,000
Change In Receivables
71,000
-493,000
104,000
-59,000
Other Non Cash Items
977,000
359,000
238,000
732,000
Stock Based Compensation
41,000
36,000
35,000
40,000
Provisionand Write Offof Assets
1,000
Asset Impairment Charge
144,000
0
0
Deferred Tax
-275,000
23,000
-22,000
219,000
Deferred Income Tax
-275,000
23,000
-22,000
219,000
Depreciation Amortization Depletion
623,000
642,000
632,000
617,000
Depreciation And Amortization
623,000
642,000
632,000
617,000
Depreciation
623,000
642,000
632,000
617,000
Operating Gains Losses
-988,000
37,000
251,000
24,000
Pension And Employee Benefit Expense
18,000
10,000
6,000
54,000
Earnings Losses From Equity Investments
10,000
-2,000
201,000
4,000
Gain Loss On Investment Securities
-232,000
-8,000
26,000
-44,000
Net Income From Continuing Operations
1,119,000
24,000
-773,000
38,000
4/7
Graham Score
Enterprising Investor
Requires deeper research. Suited for active investors.
Graham's Fair Value
$48.02
Margin of Safety
6.6%
Market Cap / Net Assets
1.9x
Net Assets: $6.2B
Warren's Owner Earnings
$2.4B
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
4/7 — Enterprising Investor
✅
Adequate Size
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
$12.8B
vs > $1.5B revenue
❌
Strong Financial Condition
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
1.44x
vs Current Ratio > 2.0x
❌
Earnings Stability
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
2 loss years (4 yrs data)
vs No negative EPS years
✅
Dividend Record
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
0.88%
vs Uninterrupted dividends
✅
Earnings Growth
EPS grew from $0.26 to $4.42 over 1 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
+1600.0% EPS growth
vs > 33% EPS growth
✅
Moderate P/E Ratio
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
9.3x
vs P/E ≤ 15.0x
❌
Moderate Price-to-Book
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
1.93x P/B (P/E×P/B: 18.0)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it matters.
✅ Adequate Size — $12.8Bvs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Strong Financial Condition — 1.44xvs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
❌ Earnings Stability — 2 loss years (4 yrs data)vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
✅ Dividend Record — 0.88%vs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
EPS grew from $0.26 to $4.42 over 1 years. Graham's 33% threshold was set over a 10-year period. Measured over fewer years (as here), the bar is proportionally lower. Share buybacks can also inflate EPS growth without reflecting underlying business improvement.
"A minimum increase of at least one-third in per-share earnings over ten years."
✅ Moderate P/E Ratio — 9.3xvs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
These metrics estimate what Alcoa Corporation is worth based on fundamentals — independent of what the market prices it at.
Graham's Fair Value and NCAV are conservative floors.
EPV assumes zero growth. These are reference points, not price targets.
Net Current Asset Value
$-16.92
Negative NCAV — liabilities exceed current assets. Common in capital-return businesses (buybacks, debt-funded dividends) and capital-intensive industries. Not automatically a warning sign.
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
$31.91
Per share, no-growth floor. Compare to current price.
ROIC — Return on Invested Capital
4.9%
Return on Invested Capital — Buffett's preferred measure for asset-light businesses. ROIC > 15% consistently signals a durable competitive advantage (moat). More meaningful than P/B for software, pharma, and consumer brand companies where most value is intangible and off-balance-sheet.
Cash Flow Analysis
Metric
2025
2024
2023
2022
2021
Capital Expenditure % of Net Income
53.4%
966.7%
N/A
N/A
N/A
Repurchase of Capital Stock
N/A
$0M
$0M
-$500M
-$150M
Free Cash Flow
$567M▲
$42M▲
-$440M▼
$342M•
N/A•
Warren's Owner Earnings
$2.4B
$1.3B
$512M
$974M
N/A
Peers & Industry
No auto-detected peers for Aluminum. You can manually compare AA against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.54%
Low — management has little skin in the game
Return on Equity (ROE)
18.9%
Excellent — management generates strong returns on equity
Return on Assets (ROA)
7.2%
Strong — management uses assets efficiently
Debt Trend YoY
-3.9% YoY
Debt is declining — management is deleveraging
Leadership Team
William Oplinger
President, CEO & Director
Age 58
Pay: $3,768,357
0.326% of net income
Molly Beerman
Executive VP & CFO
Age 61
Pay: $1,696,610
0.147% of net income
Matthew Reed
Executive VP & COO
Age 52
Pay: $1,609,401
0.139% of net income
Heather Hudak
Senior Vice President of Tax
Louis Langlois CPA
Senior Vice President of Treasury & Capital Markets
Top Institutional Holders
Institution
% Owned
Shares
Blackrock Inc.
10.76%
28,392,633
Eagle Capital Management LLC
5.34%
14,097,362
FMR, LLC
4.87%
12,852,778
Vanguard Portfolio Management LLC
4.79%
12,644,935
Vanguard Capital Management LLC
4.46%
11,776,650
State Street Corporation
4.12%
10,881,537
Dimensional Fund Advisors LP
3.27%
8,625,297
Geode Capital Management, LLC
2.25%
5,942,801
Risk Analysis
Beta (Market Risk)
1.62
High volatility — moves more than the market
Short Interest
3.4% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
0.30x
Conservative balance sheet — low financial risk
Current Ratio
1.53x
Adequate liquidity
52-Week Price Range
Low: $28.50Current: $44.84High: $84.38
Currently at 29% of 52-week range
Alcoa Corporation (AA) fundamental analysis — Overall grade D based on profitability, financial health, valuation and cash flow. Graham's
Fair Value: $48.02. Margin of safety: 6.6%. Gross profit margin: 16.9%. Operating margin: 5.9%. Net margin: 9.0%. Market cap: $11.8B. Sector: Basic Materials. Industry: Aluminum. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett
principles.
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