ABOUT AFRICAN RAINBOW MINERALS
📊 African Rainbow Minerals (ARM), a South African diversified mining and minerals company, was founded soon after the dawn of democracy in South Africa in 1994, and has its headquarters in Sandton, Johannesburg. South African billionaire, Patrice Motsepe, originally established the company as Future Mining.
📊 By 2002, ARMalready had market capitalization of R5 billion, and the company had its first public offering on the Johannesburg Stock Exchange (JSE) under the name of ARMgold Limited – ticker symbol “ARI”. Today, African Rainbow Minerals is one of the leading mining companies in South Africa, and one of the largest black-controlled mining companies globally.
📊 The company mines and beneficiates manganese ore, iron ore and chrome ore, platinum group metals, nickel, coal and copper. It also manufactures manganese and chrome alloys, and invests in gold through shareholding in Harmony Gold, in which it has a 20% stake. Its portfolio does not only include platinum, gold, coal, iron and copper mines, but the company also owns other strategic resources and operates an exploration division.
📊 In 2010, ARM invested US$380 million in a joint venture with Vale to develop a copper mine in Zambia. The company also invested approximately US$1.12 billion in mining in Zimbabwe, and also has a 50% stake in Morobe Mining Joint Ventures (MMJV) of Papua New Guinea.
📊 ARM is also involved in joint ventures with Anglo American Platinum, Impala Platinum, Glencoreand Assore. The company received membership from the acclaimed International Council on Mining and Metals in 2009.
📊 Volatility in the South African mining industry, however, necessitated the cutting back of operations and retrenchments at many mining companies, which led to a significant drop in ARM’s market capitalization. From 2011 to 2016, share prices dropped by almost 50%. Since then, however, the company’s shares have slowly been making a rebound as investors have taken a renewed interest in this historically successful company.
📊 ARM’s major shareholders include African Rainbow Minerals & Exploration Investments, Allan Gray, Public Investment Corporation, ARM Broad-Based Economic Empowerment Trust and Kagiso Asset Management.
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AFRICAN RAINBOW MINERALS SHARES GROWTH DRIVER
- African Rainbow Minerals’ diversified nature, coupled with its low unit cost operations and multiple growth opportunities, makes the company attractive to investors, as the company’s focus is on long-term survival. Through a number of key mining acquisitions – both locally and abroad – ARM enjoyed market capitalization of R59 billion in 2008. Its 20% stake in Harmony Gold, the world’s 12th largest gold-mining company, also stimulates growth.
- African Rainbow Minerals boasts a proud history of continuous growth which has been driven by ambitious ventures and innovative management practices. Today, strong Black Economic Empowerment (BEE) credentials are a major growth driver. This further boosts investor confidence.
- The continuing instability in the mining sector has however, caused company earnings to drop by 97% from 2014 to 2015. In 2016 the company announced more job cuts and capital cost reductions across its operations, caused by soft commodity prices. While the market volatility continues, these cost cuts will nevertheless enable the company to stay afloat and grow – albeit at a slower rate.
- ARM’s sustainable business model enables the company to integrate sustainability into its business practices. It graphically reflects the interrelatedness of economic, environmental and social considerations in creating value for shareholders and benefit for all its stakeholders.
AFRICAN RAINBOW MINERALS INVESTOR TIPS
- Although trade has been negative for the most part, and the company’s performance is still low, ARM investors are being advised to hold their positions for now.
- Though it is understandable that investors have been reluctant to buy and sell companyshares over the past few years, the forecast is that a slow recovery process is on the cards. The current unpredictability of the mining sector will however – for now- continue to have a negative impact on share purchases.
- In 2017 African Rainbow Minerals recorded revenue of R9.6 billion and net income of R1.432 billion, both an increase on the previous fiscal cycle. Shareholders, who buy and sell company shares, can expect solid dividends and returns.
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Before buying any stock or share one has to consider a few factors.
STEP 1: PROPER RESEARCH IS ESSENTIAL
Upon deciding you want to buy AFRICAN RAINBOW MINERALS Stocks / Shares, it is critical for the serious investor to do proper research into the said company. Its values should align with those of the investor’s current portfolio. An investor needs to familiarise himself with the basics and history of the company, as well as its leadership and performance in the market. Its company reports should also be scrutinized.
Consultation with a brokerage firm can also assist in determining whether investing in a specific company will complement the investor’s current portfolio. The investment “risk ladder”, which identifies asset classes based on their relative riskiness, is another useful tool when determining which company’s stock / share is the best to buy.
STEP 2: CALCULATE THE AMOUNT OF INVESTMENT IN AFRICAN RAINBOW MINERALS STOCKS / SHARES
It is important for an investor to monitor his total investment in stock in order to keep his portfolio aligned to his investment strategy. The overall value of his holdings will change with the fluctuation in stock prices, which can throw his portfolio off balance. To determine the amount to invest, multiply the number of shares of each stock by its current market price to determine the total investment in that specific stock. For example, if you own 100 shares of a $5 stock, multiply 100 by $5 to get $500.
STEP 3: DECIDE ON THE STOCK / SHARE ORDER TYPE
Investors can choose from a market order, a limit order, a stop order (also referred to as a stop-loss order) or a buy/sell stop order. It is important to familiarise yourself with each type’s pros and cons before deciding which one will suit your current stock profile best. An investor should be guided in this choice by his investment objective.
STEP 4: OPEN A BROKERAGE ACCOUNT
A brokerage account – also known as taxable investment account – is similar to a retirement account, but more flexible. Where a retirement account has limitations on the amount of money that can be contributed annually, and restrictions on when funds can be withdrawn, a brokerage account is more flexible. The latter has no income or contribution limit and the investor can withdraw his money at any given time. This flexibility, together with its potential investment gains, makes a brokerage account more attractive to serious investors. Brokerage accounts are ideal for goals or savings that are further than five years away, but closer than retirement. It can also supplement an investor’s emergency savings.
STEP 5: COMMIT AND PURCHASE AFRICAN RAINBOW MINERALS STOCKS / SHARES
Lastly, commit to the stock. Pro Tip: Monitor the value of your stock to ensure you have a growing stock value and dividend pay-out. Regularly check the share price online to ensure your investment delivers a positive return on investment. You are now a proud owner of AFRICAN RAINBOW MINERALS stocks / shares.
5 Questions to ask yourself before purchasing any stocks or shares.
- Is it the best time to buy this stock / share?
- Should I buy AFRICAN RAINBOW MINERALS stocks / shares in the current economic climate?
- Can I afford to buy this stock / share?
- What is the forecast of the stock / share growth?
- What is the current price per earning ration on the stock / share?
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