Penny Shares Guide

Oil and Africa, Worth a Pun–in the Shape of Afren? Natural resources and Africa continue to be the two themes for investors of the new decade for me. Oil, the black gold and Africa, the dark continent are an interesting pun to some.  But for a company called Afren, an African independent oil and gas company, founded in 2004 with £1m from family and friends and currently listed on the Main Board of the LSE, it’s all about its big ambition to be the world premier African oil producer and explorer. Afren is not just living for the present; it’s looking years ahead.

Afren lost $37 million after tax in the first half of 2008, but rich in cash, it repaid $26 million of debt and bought into a few very intriguing oil fields. The company has 16 oil assets in Nigeria, Cabon, Congo, Cote d’Ivoire, and Ghana. They suck out 27,000 barrels of oil a day. Afren’s share price has gone up 6 times since March last year. With shares trading at 103.75p as of 22/1/2010 and 889.07m shares in circulation, the company has a market cap of £922.40m. Its current EPS is -9.68 and P/E ratio -10.71. But analysts predict revenue to be £441m for the coming year.

Afren’s biggest share value is probably in the Gulf of Guinea, the top oil hot spot. But such an investment is not without risks. Also, as Afren has already gone up, is it a bit late to the game for investors? Still, oil will be in big demand, when the recession is a history. And the young Afren could eventually realize its mission as Africa’s top oil company, because of all the untapped bonanza of black gold. Remember, Oil’s Well That Ends Well.

John Mulligans Podcast click here to find it

John Mulligan speaks about the health of the world’s stock markets and investor’s appetite for equities across these markets since the on set of the economic downturn. Since the credit crisis, the markets have been starved by unscrupulous companies who have required vast amounts of capital to save them from bankruptcy.

He also speaks about how the onset of the economic crisis has starved the IPO markets. What he is debating is whether the health of these markets is improving. I agree with him in his assessment that the markets have slightly recovered. This improvement of the stock markets across the globe is obvious through the fact that activity has significantly picked up through 28 new listings raising over $400 billion in investment capital throughout the second quarter of 2009.

On a global level, the pace of initial public offerings have picked up substantially over the two quarters. Forty-nine successful IPOs have raised some $34 billion compared from just four IPOs raising barely $1 billion a year ago.

In the world market, there is a substantial increase in activity. It is absolutely vital that equity finance begin to flow again in order to fund the companies that power economic growth. We see signs that the markets are recovering.

So Got pick some nice Penny Shares that will ride the next wave!