Wednesday, August 8, 2007

Kaiser Aluminum Corp.

Kaiser Aluminum Corp. is a NASDAQ listed security that has been trading in a range between $36.50 and $89.24 over the past year. With 20,575,420 shares outstanding, a recent price of $60.54 gives a total market capitalization of $1,246,870,421. While there are certainly larger companies, Kaiser Aluminum Corp. has definitely earned its place in the pack. Last year, Kaiser Aluminum Corp. created $40.56 in earnings for every share outstanding.

Kaiser Aluminum Corp. is currently priced by the market at 1.50 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price over $50 a share and earnings per share in excess of $1 a share, Kaiser Aluminum Corp. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.