Century Aluminum: A High-Stakes, Strait Of Hormuz Hedge

David B. McMillan305 FollowersFollow5ShareSavePlay(13min)CommentsSummaryCentury Aluminum Company (CENX) is highly sensitive to aluminum spot prices and regional premiums, making it a pure commodity price play.CENX’s margins benefit from US tariffs and the potential closure of the Strait of Hormuz, but these are macro-driven and could reverse quickly.Valuation suggests CENX is priced for perfection, with current market cap far exceeding a normalized EV/EBITDA-based equity value.I rate CENX as 'Hold'—the stock is best viewed as a speculative hedge on sustained geopolitical disruption, not a long-term core holding. Suphanat Khumsap/iStock via Getty Images Century Aluminum Overview What does a mid-cap aluminum smelting company have to do with Iran closing the Strait of Hormuz? Everything, it turns out. You probably know that a massive amount of global oil trade passes throughThis article was written byDavid B. McMillan305 FollowersFollowMy name is David B McMillan and I am an investor interested in fundamental valuation. My philosophy is fundamental investing - I seek to identify underpriced securities relative to their potential future cash flows. I also use tactical allocation, investing more aggressively when equity prices are lower, and more conservatively when they are higher. I have a BS in Physics and BA in Philosophy from UCSB, and am currently a CFA Level 2 candidate. I am mostly interested in covering stocks in the aerospace and defense sector, but I am also interested in retail and tech companies. I have a 12 year investing track record, with documented investments in AI, tech, and crypto themes before they were widely understood - NVDA in 2017, 8000 percent gain; PLTR at IPO, 1870 percent gain; AMD in 2017, 3700 percent gain; TSLA in 2016, 3400 percent gain. Had all of Mag 7 in my portfolio by 2018, before those stocks were called the Mag 7. My current demo portfolio, started in April 2025 with about $8k of my my own capital, is so far achieving a Sharpe ratio of 3.49 compared to IVV of 2.42 in the same time period. My average time-weighted return is 0.30 percent per day vs IVV at 0.14 percent per day.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.