Today Alcoa Inc. (NYSE: AA) announced some restructuring plans that will trim down (SELL) some under-performing consumer packaging and automotive castings divisions. It will be taking some charges to the tune of $845 million as well, and intends to gear up for expansion into higher margin areas. Alcoa also said it raised cash by selling its 7% stake in Chalco, the Aluminum Corp China ADS (NYSE: ACH) and bringing in $2 billion dollars on what was initially a $200 million investment -- "A ten bagger."

It is this latter decision that is not smart, and without further explanation from management I have to question selling a winner. If you look at all of the things that Alcoa did in the last 10 years you will find that the Chalco investment was the smartest, and more importantly, the most profitable, thing it has done. For many years Alcoa stock has been adrift. Since it sold the stock it has only gone up further and as I write these words and look at the price now, ACH is trading up over 5% more to $75.70.

Whittling Away at the Dow has been my longest multi-part blog to date. This is the seventh and concluding post of the series and for those that have been following along I hope there has been something of value for you in my comments. Among my surprises have been that there was so much value still left in the Dow given it's reaching new highs almost daily; I was surprised Disney was among the stocks that made the cut, and I was surprised at how few comments I received. You might notice that all six stocks that made the cut were from the top half of the Dow 30, perhaps I became tougher as I went along, but that's how it worked out. If you want to read the previous posts the following links will get you there: Part 1, Part 2, Part 3, Part 4, Part 5, or Part 6. So here we go, whittling the six down to three. Here are the stars:

• Alcoa Aluminum (NYSE: AA): Aluminum
• American International Group (NYSE: AIG): Insurance
• Caterpillar Inc. (NYSE: CAT): Heavy duty construction and mining equipment
• Disney (Walt) Company (NYSE: DIS): Entertainment production, media and theme parks
• Exxon Mobil (NYSE: XOM): Petroleum exploration, refining, and sales
• Home Depot (NYSE: HD): Retail and wholesale hardware and construction materials

More than a few optimistic reports have been written as the Dow Jones Industrial Average (DJIA) continues to climb to new highs. Given my value perspective and having run a few stock screens, some of the 30 stocks in the Dow have actually floated to the top. I will be reviewing the entire Dow in search of deep value and summarizing on my top three (10%) from a value perspective. The following is my view of the first five Dow stocks.

3M Company (NYSE: MMM) appears to be fairly valued from my perspective. I like the low debt ratio of 0.3 and higher than average yield of 2.19%. Given the price-to-book of 5.94 though, I think 3M will have to continue to expand its earnings overseas to interest me further. This is a quality stock, with good margins and good returns on equity, assets, and investment that are all higher than its lower than average P/E of 15. I view this stock as a good investment but not a great investment, and one that provides some downside protection.

Alcoa Aluminum (NYSE: AA) is on everyone's watch list, and for good reason. It reminds me of a line from the long-running TV show Married with Children, where Al Bundy shouts out to his wife Peg after a long day at the shoe store, "Either feed me, or feed me to something, I just want to be part of the food chain." There have been rumors galore that Alcoa might fall prey to a buyout from BHP Billiton Ltd ADR (NYSE: BHP) or another large player wanting to expand its North American presence. In the meantime, Alcoa has announced that it has an interest in acquiring Alcan Aluminum (NYSE: AL).

At 2.28, the price-to-book ratio of Alcoa is less than half that of 3M, and the price-to-sales is half too at 1.14. The debt levels are low and the price-to-cash-flow is low. Alcoa pays a lower than average (for the DJIA) yield of 1.75, but still respectable. For whatever reason, investors may be looking for soft pricing in aluminum related to concerns about a slowing world economy. While this may be a concern in the U.S., international growth does not seem to be slowing down. Alcoa is up about 35% from last year's lows, but only a couple of dollars from its highs of two years ago, so its path has been erratic. The low metrics, expanding international markets, and the high probability of consolidation in the market should create future pricing power. This does seem like a value play to me.

You don't need a reminder that the Chinese stock market took a dive this week. That, combined with a few untimely comments from bearish economists, sub-prime lenders facing 'issues', housing foreclosures up, housing starts down, oil prices up and squabbling in Washington about federal spending took its toll and rattled world markets.

This writer remains an optimist -- and a pragmatist, which is of at least equal importance -- and still the contrarian. I don't care how scary China looks right now to some, this is a buying opportunity. Here's how I see it: In the long run the market is going up! The Chinese market will be the biggest market! And I want to buy at bargain prices for the long term!

The Aluminum Corporation of China ADS (NYSE: ACH), which I have discussed before, has not been mentioned in the conversations about Alcoa Inc (NYSE: AA) possibly being a buy-out candidate, or in the comparisons with Alcan Inc. (NYSE:AL), its Canadian competitor.

ACH closed yesterday at $22.98, with a P/E under 8.0 and a 5.5% dividend yield. In addition to this, the P/S was 0.65, and the P/B was 0.62. To me this indicates a tremendous value. What if its profits were to drop in half? Well, surprisingly, it would than be about par with Alcoa.

For comparison, Alcoa has P/E of 14.0 and a 2% dividend yield. The P/S was 1.17, and the P/B was 2.07. These are very favorable numbers, and I actually considered Alcoa to feature here. But, as you can see, it seems far more pricey than ACH. Also considering that Alcoa has been mentioned as a buyout target at a considerable premium to its current valuation - that only makes ACH look even cheaper. ACH has only been public for about 5 years, chart below.

You can see that it has had a wild ride but clearly an upward trend.