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Thursday, March 28, 2024

Gartman Sees Alcoa Shares Hitting $40; CEO Sells At $16

Courtesy of Benzinga.

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Aluminum stocks are the "best buy out there," television stock maven Dennis Gartman said on CNBC Wednesday.

Gartman's thesis is that increasingly strict fuel efficiency rules will boost demand for aluminum.

Under U.S. rules issued two years ago, the average fuel economy of new cars is set to rise to 54.5 miles per gallon by 2025, up from a current 29 miles per gallon.

"The easiest way to meet EPA requirements for mileage is to make the automobiles and trucks lighter, and aluminum does that," Gartman said. "And everybody's going to be selling a lot of automobiles for the Chinese."

But shares in Alcoa (NYSE: AA) sagged two percent Friday, despite a lack of news.

It was reported this week that Alcoa CEO Klaus Kleinfeld recently sold $12.9 million worth of Alcoa shares for an average of $16.08 each.

"It implies that Kleinfeld now sees Alcoa shares fairly valued," Ian Dogan InsiderMonkey told Barron's Monday. "We think the stock is slightly overvalued at these levels."

Shares in the metal-making giant are up nearly 57 percent year to date and Gartman said, "everybody laughed at me nine months ago when I started buying it."

Gartman thinks the shares will "go to $40."

Alcoa traded Friday at $16.68, down 1.8 percent.

Posted-In: Dennis GartmanAnalyst Color CNBC News Rumors Management Analyst Ratings Media

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