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Can you extrapolate Alcoa results to other areas of the market? Pete Najarian, co-founder OptionMonster.com, thinks you can, although the takeaway changes depending on your time horizon.
Takeaway for Long-Term InvestorsAlthough Alcoa posted a second-quarter loss, if you're a long-term investor, Najarian suggests focussing on what CEO Klaus Kleinfeld said about the aerospace and automobile markets in an interview on CNBC. "Alcoa is successfully capitalizing on accelerating demand in high-growth end markets such as aerospace and automotive," Kleinfeld told CNBC .
Najarian takes the commentary as confirmation that companies such as Ford and Toyota – Alcoa customers – are experiencing solid demand for their lighter more fuel efficient vehicles.He also takes it as confirmation of Boeing’s 20-year market forecast . The aviation giant predicted demand for 34,000 new aircraft worth $4.5 trillion.Those data points suggest to Najarian that although the global economy may be slowing, it’s still growing, just at a slower pace. And in the long-term that's bullish because if the global economy continues to improve, even slowly, he thinks stocks are cheap.
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