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."

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