The same Fortune interview with Jim Rogers, which I referenced yesterday also contains an excerpt from his new book, A Bull in China. In it, he goes over a few stock picks, including one I thought worth bringing to the attention of investors interested in profiting from rising CAFE standards and other increases in vehicle efficiency: Jim says:
Aluminum Corp. of China (Chalco) (NYSE: ACH). Three year trend: profits up 86.7%, revenues up 88.8%.
Chalco is the largest producer of primary aluminum in the world’s fastest-growing aluminum market. Established in 1999 out of state-owned firms, this No. 2 aluminum manufacturer in the world is reported to be planning aggressive acquisitions, including a possible takeover bid for Alcoa. While some new plants are being built, others in China have been closing due to the high electricity costs. But world demand for this commodity continues to grow.
As petroleum becomes increasingly expensive, there will be an increasing push to improve vehicle efficiency. One of the simplest and most cost effective ways to do this is to incorporate more aluminum, as I argued in this article about Alcoa (NYSE:AA.)
I’ve long been leery about investing in Chinese firms, because I have serious doubts about Chinese commitment to shareholder rights and disclosure, although these may be improving. Nevertheless, my respect for Jim Rogers has peaked my interest, both in the stock and in his latest book.
DISCLOSURE: Tom Konrad and his clients have positions in any of the securities mentioned here: AA.
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