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Alcoa Earnings Will Ride Rising Aluminum Demand: Strategist

Alcoa is one of the first Dow components to report second-quarter earnings and gives some sort of indication on how the economy is doing, Brian Stutland of Stutland Equities, told CNBC in an interview.

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AA Earnings Trade

"You have people mining material, they sell to the basic materials [companies] like Alcoa, like a Dow Chemical , who then in turn sell to the manufacturer, who then in turn sell to the consumer. So certainly there is a huge demand coming out of these basic-material type stocks," Stutland said.

He adds that the chain of command demonstrates a boost on higher global aluminum demand.

"Analysts are expecting about 34 cents a share, that should be a huge increase from last quarter, about 160 percent gain in net income. I would definitely be a buyer here. It's trading at 22 times earnings P/E," Stutland said.

He added that commodities are also "looking great" and that he expects earnings to exceed. "Analysts are expecting about a 15 percent gain in Exxon Mobil , Chevron about 35 percent gain in net income...They're trading very cheap compared to the type of growth that they're getting," Stutland told CNBC.

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Disclosures:

Disclosure information was not available for Brian Stutland or his company.

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