Following Steven Cohen: Century Aluminum (CENX) May Be Headed to $75

Today we want to take a look at Century Aluminum (Nasdaq: CENX) a stock Steven Cohen's SAC Capital just recently disclosed they raised their stake in to 2.1 million shares, or about 5%, at the quarter ended 12/31/07. This is up nearly 1.2 million shares from the position they held at the quarter ended 09/30/07.

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica.

SAC is a multi-strategy hedge fund founded by Steven A. Cohen in 1992 with 9 employees and $25 million in assets under management. As of September 2007, the firm has grown to over 800 employees with approximately $14 billion in assets under management. It is considered one of the largest and best-run hedge funds in the world.

Here are some reasons we like this trade from Cohen's SAC Capital

1. Higher aluminum price expectations over the long-run and short-term.

2. Valuation. The stock could easily go to $75. Today the stock is down nearly 4% on weakness in metal stocks, which could be a buying opportunity.

3. Another large, successful hedge fund, Citadel LP, also owns a large stake in the company. The last time we saw the two hedge fund heavyweights separately build up big stakes in a company was BioMarin (Nasdaq: BMRN). Needless to say, the results were amazing - the stock ran from around $17 to over $40 in about 6-months.

4. Takeover bait. This company has takeover written all over it.

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