It was reported on Sunday, June 21, that Anglo-Swiss mining company Xstrata has proposed a merger of equals to the board of Anglo American ADR (NASDAQ: AAUK), hoping to create a new, more competitive mining giant. Rumors have been milling about for a while.

Together, Anglo American and Xstrata would have a market capitalization of approximately $68 billion, (AAUK's $35 billion + XTA.L's $33 billion) and be larger than Rio Tinto plc ADS (NYSE: RTP), which ended the trading day last Friday with a capitalization hovering over $42 billion.

Last year, my best Chasing Value recommendation was Aluminum Corp of China ADS (NYSE: ACH), which sailed from $22 per share to a 52-week high of $90.95. I will take credit for finding a winner, but I cannot in all honesty say that I thought it would more than quadruple -- that part was luck. (The original story was Chasing Value: Aluminum Corporation of China ADS, which I still think is worth a read today.)

If you acquired what is often referred to as Chalco (China Alum. Co.) anywhere near the time I recommended it and still own it you are probably still very content with only perhaps a 90% gain as the stock has come down some, closing last Friday May 9 at $40.98

Another of my recommendations was General Dynamics Corp (NYSE: GD), which closed Friday at $90.92. This one is only up a few percentage points from my starting point of $88 per share, but you will note, curiously, that it is only 3 cents off ACH's high. Given the market's bad year, a gain when the market is losing is a bigger plus than the casual observer would perceive. The defense sector has provided the anticipated market defense as I discussed.

The new earnings seasons kicks off tomorrow after the market closes when Alcoa Inc. (NYSE: AA) is scheduled to report first-quarter results.

Pittsburgh-based Alcoa has missed earnings estimates in only one quarter out of the past five. When the leading aluminum producer reported fourth-quarter results back in December, earnings of 36 cents per share beat the consensus of analysts surveyed by Thomson Financial by three cents, but were down from 74 cents per share in the same quarter of 2006. For this current quarter, analysts expect earnings of 50 cents per share.

Alcoa's full-year 2007 earnings per share of $2.60 missed estimates of $2.83, and were down from $2.96 for 2006. However, Alcoa also reported record revenue of $30.7 billion, as well as record income from continuing operations.

In March, Alcoa announced a quarterly common stock dividend of 17 cents per share, continuing a more than 60 year streak of quarterly dividends. In other recent news, former Merrill Lynch (NYSE: MER) CEO Stan O'Neal joined Alcoa's board of directors in January. Alcoa joined rival Aluminum Corp. of China (NYSE: ACH) in acquiring a stake in Rio Tinto (NYSE: RTP). And a lawsuit against Alcoa by the government of Bahrain was suspended by the U.S. Justice Department, which is conducting its own bribery investigation.

Alcoa's forecast earnings per share growth for the year is 9.85%, which is better than the industry average and the S&P 500. The consensus recommendation from analysts is to buy Alcoa, and has been for at least 90 days. The share price has been climbing from the 52-week low of $26.69 in January, and closed at $39.00 on Friday.

BloggingStocks contributor Sheldon Liber took a good look at Alcoa's prospects back in February. For other news that could influence Alcoa's results, see BloggingStocks' Alcoa coverage.

One of our readers commented recently that I had earned his respect because I always tracked and posted my bad picks not just the good picks. I have been told this often but it is not so uncommon in better publications. Barron's weekly and Fortune Magazine both do the same. It's only fair, and should be standard operating procedure. I have not seen James Cramer do it but then he makes thousands of recommendations so how can he track anything?

I also think that in a blog you have the opportunity to establish a dialogue with readers and might even learn something. I have learned plenty from readers and colleagues alike. So having exposed some of my failings in the past month I thought I would look back and and review some of my successful picks.

When I posted Chasing value: Aluminum Corporation of China ADS eleven months ago in March, ACH was $22.98. It closed yesterday at $39.03 for a 70% gain. It had reached a 52-week high of $90.95 in between. We took some money off the table at $88 and are now playing with the 'house money'. This one has worked out great.

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.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Mark Skousen, editor of Forecasts & Strategies and host of the July 4th investor think tank FreedomFest, chose Aluminum Corp. of China (NYSE: ACH), which rose 45% as of 6/1/07. Here is his original recommendation for ACH and his new favorite stock for the rest of 2007.

Updating his earlier selection, the advisor asks, "What's the future of a stock that has doubled in the past year, and up over 40% this year? I am tempted to take my profits and go elsewhere.

"But demand for alumina and aluminum remains strong. Aluminum prices have been flat for the year, but have more than doubled in five years. The company, commonly known as Chalco, is the world's number two alumina maker, and it beat forecasts with a 44% rise in second half earnings.

"The giant producer intends to enhance its global competitiveness and focus on expanding capacity and further acquisitions this year, aiding the nation's hunt for raw materials to feed a rapidly growing economy (8-9% GDP annual growth). Chalco is also China's largest aluminum maker.

"It reported a net profit of 5.0 billion yuan (US$645.7 million) for the six months ended December, bringing yearly profit to 11.745 billion yuan last year versus 7.02 billion yuan in 2005. Overall, I think Chalco can increase in price, but just in case we are wrong, let's set a protective stop of $30 a share, and sell if it hits this level on the downside."

See all 20 stocks the advisors picked for the second half of 2007.

Despite rising 70% since he first recommended the stock, Nathan Slaughter remains bullish on the long-term prospects for Aluminum Corp. of China (NYSE: ACH).

In his Half-Priced Stocks newsletter, he explains, "Aluminum Corp. of China, known as Chalco, is China's leading aluminum producer and the world's second largest supplier of alumina -- a key raw ingredient used to manufacture aluminum.

As a rule, he points out, he is reluctant to buy in "frenzied sectors or regions where speculation is still rampant." And indeed, he says, Chalco is "square in the middle" of both. He notes, "Not only is the firm based in China, but it is also heavily tied to volatile commodities prices."

Despite these reasons for caution, he remains bullish on the stock, explaining, "Even after this rally, though, the shares are still trading below where they were last March -- and at a reasonable 18% discount to our $33 fair value estimate."

Meanwhile, despite the run-up in aluminum prices over the past few years, he believes the long-term story remains compelling. The world's population, he observes, is rising every day, global trade is expanding, and the rapid industrialization of fast-growing nations like India and China is fueling heavy demand.

Meanwhile, he adds, the company maintains a monopolistic 90% share of the alumina market in China, where consumption is expected to continue racing ahead at a +12% clip over the few years.

He cautions that ACH is a volatile stock that is best suited for risk-tolerant investors. However, the advisor concludes, "All things considered -- including a hefty 4.6% dividend yield -- we think the risks are outweighed by the potential rewards."

For more stock picks from the leading financial newsletter advisors, visit Steven Halpern's free daily website, TheStockAdvisors.com.

I've just returned from the World Money Show in Orlando where more than 10,000 investors gathered to learn about global investing. I had a chance to meet with many of the U.S. and foreign financial experts featured at the show, and over the next week I will share some of their top investment ideas. To view all of the stocks featured in this special global report, click here.

In his search for high growth and income, Mark Skousen searches worldwide, and indeed, his latest trio of dividend plays reach from Australia and China to Peru.

The editor of the Skousen High Income Alert and host of the annual investor think tank, Freedomfest, explains, "We hold two foreign commodity stocks in our high-yield portfolio that have achieved double-digit percentage gains, while paying double-digit percentage dividend yields. And both stocks look like winners for 2007 as commodity prices climb.

"Southern Copper Corp. (NYSE:PCU) is the world's fifth largest copper producer and it is only one of a select few commodity plays that pays a large dividend.

"Southern Copper now is up 19% since the first of the year and up 39% since we initially recommended it in early October. Despite lower copper and gold prices in the past six months, Southern Copper is minting money by maintaining low costs and increasing production.

"Plus, the stock pays an incredible 11% dividend. It should pay a $1-plus dividend in the next week or two weeks. What's not to like? Keep on buying. Southern Copper is part of our incredible high-income portfolio.

An article by Dr. Mark Skousen, editor of the Forecasts and Strategies newsletter, places strong emphasis on Aluminum Corp of China (NYSE: ACH) as an expected performer in 2007. While acknowledging the weakening commodity prices of aluminum, Dr. Skousen points to a pair of acquisitions and a restructuring of assets as signs that Chalco is taking steps to ensure profitability and growth.

The article states that Chalco sells at eight times prospective earnings and also sells at just 35% of sales. The article also states that Chalco's operating margins are 31% and that management is earning a 29% return on equity. Additionally, Dr. Skousen writes that Chalco trades at a 30% discount to Alcoa.

Dr. Skousen bases most of his enthusiasm on the Chinese economy and a strong need for aluminum in that market. Not to be forgotten is the ever-increasing use of aluminum in automobiles and that's a long-term market base that stretches world wide. Dr. Skousen finishes his article by stating that he believes "the stock will significantly rise in value."

Skousen, of course, contributed to BloggingStocks' 2007 Top Picks report, and chose Chalco as his favorite speculative investment idea for 2007.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Aluminum Corp. of China ADS (NYSE: ACH) is the favorite speculative investment idea for 2007 from Dr. Mark Skousen, editor of Forecasts & Strategies and the host of the annual FreedomFest investor think tank.

He explains, "The company, commonly known as Chalco, is the world's second-largest aluminum maker. Lighter than steel and resistant to corrosion, and high in electrical conductivity, alumina is widely used in applications such as construction, power, packaging, and autos.

"However, commodity prices have cooled off lately and alumina has been no exception. Prices have fallen during the past year -- and that retreat has begun to affect the company's profitability. But Chalco is mitigating the negative impact of declining prices by snapping up smelters in China to expand its aluminum output.

"The company has also just announced a restructuring of its assets after buying two Chinese aluminum firms. Chalco announced that it plans to offer a stock swap involving Shandong Aluminium Industry Co. and Lanzhou Aluminium Co. Most analysts I've talked to think that this move is positive. Chalco's CFO told investors that the company would hold a shareholder meeting around January 15 to vote on the share swap.