Aluminum ended July on a high note and there are several stocks that could benefit from the recent strength in the metal and prove opportunities for investors. Aluminum futures capped July with a 2.72% monthly gain, the most since January and their second straight monthly advance. JPMorgan recently noted that while there’s some reason to be cautious near-term due to a summertime lull and planned smelting capacity restarts in China, the bank is constructive on aluminum-related stocks “longer-term given aluminum’s recyclability and light weight, which we believe play a key role in the energy transition over the next few decades.” “Furthermore, we like secular growth trends in packaging as consumers and new product launches pivot from traditional plastics,” the analyst, Bill Peterson, wrote in a note. CNBC Pro found 11 stocks using data from Refinitiv that tend to move with aluminum prices. Each one is a member of the Russell 1000 and has a 50-day correlation coefficient of at least 0.4, which indicates at least a moderate correlation. Here are the names: Southern Copper Corporation , which produces copper, molybdenum, silver and zinc, tops the list with the strongest 50-day correlation coefficient of 0.57, as well as the highest average correlation going back to 2015. It’s up about 40% this year. It’s followed by mining giant Freeport-McMoRan and Air Products and Chemicals , an industrial gases company. Jefferies recently reiterated its buy rating on Freeport, calling its operational performance “underappreciated” and “impressive despite a long list of challenges in recent years.” It raised its price target on the stock to $55, which implies about 25% upside from Tuesday’s close. Further down the list are stocks with more moderate correlations to aluminum: chipmaker Texas Instruments , Domino’s Pizza , Align Technology and Korean e-commerce retailer Coupang . There are also a handful of financial firms, including New York Stock Exchange owner Intercontinental Exchange , Cboe Global Markets , First American Financia l and investment firm KKR . —CNBC’s Michael Bloom and Gina Francolla contributed reporting.
