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P Pitch Archive Stock pitches across investing competitions
← Spring 2016

Alcoa Inc.

AA pitch long Austin Kim ’16, McCoy Jen, CFA ’17, Audun Nordtveit ’17

Thesis

Alcoa is set to spin off its value-added business, Arconic, which has significant margin expansion potential. The Engineered Products & Solutions division within Arconic is currently operating at EBITDA margins that are 10% lower than those of its peers, and this gap is expected to close over time, driving growth for Alcoa.

Did it work?

worked confidence: high

The long thesis delivered a +121.6% return over roughly 10 years (~8% annualized), a strong absolute gain that aligns with the bullish direction. The core structural event — the separation of the value-added Arconic business from Alcoa — did occur in 2016, and Arconic was subsequently acquired by Apollo at a premium after margin-improvement pressure, consistent with the value-unlock and margin-catch-up thesis. With the full horizon elapsed and the directional call vindicated, the pitch played out.