Opinions
Rick Rule
Africa Oil Corp.
AOI-T
TOP PICK
Dec 13, 2024
$1.925
Stock price when the opinion was issued
Oil and Gas (Integrated Oils)
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BUY
There are political risks. Price is based on Nigerian assets alone. The major discovery in South Africa, world class discovery in Namibia and the exploration portfolio are not included in the stock price. The driver is production growth. Example of the sum of the parts is greater than the whole. The Lundin family has a controlling interest.
Oil and Gas (Integrated Oils)
TOP PICK
Excellent stock for risk oriented investors.
Assets are worth double current market capitalization.
Debt being paid off fast, with high exploration upside.
Major undeveloped deposit in Kenya coming for free with current market cap.
Despite political & oil price risk, current discount on share price providing large margin of safety.
Oil and Gas (Integrated Oils)
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RISKY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research
AOI has lots of cash, a cheap valuation and very rapidly growing revenue and earnings as wells come onto production over the next two years. It is fairly small and needs to be considering high risk, but we would see it as a BUY for small cap sector investors.
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Oil and Gas (Integrated Oils)
TOP PICK
Selling at a 50% discount to his assumed NAV. Primarily operates in Nigeria, second in Namibia. Likes Lundin family management (wonderful track record), and he's done business with them for almost 50 years. Aggressively returns cash to shareholders via dividends and share buybacks. Strengthening its balance sheet, reinvesting in the business. Yield is 3.53%.
(Analysts’ price target is $3.38)
Oil and Gas (Integrated Oils)
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He likes out-of-favour assets. Oil & gas are out of favour, especially in Africa. Wonderful job of paying down debt from latest acquisition. Can now focus on returning cashflow to shareholders, while still exploring Nigeria and Namibia.
(Analysts’ price target is $3.33)Trades at 50% discount to net present value of existing Nigerian assets, which means you get everything else for less than free. Still has backing from the successful Lundin family. Yield is 4%.