Street Smart Investor
Long-term horizon, energy, natural resources, micro-cap

Arabian American Development: Undervalued With Multiple Potential Stock Upside Triggers

The Stock - Arabian American Development Company (ARSD)

Current Market Price - $8.23

Investment Recommendation - Buy with a 2-3 year time horizon

Upside Triggers Summary -

Trigger One - Arabian American Development has a 35.25% stake in Al Masane Al Kobra Mining Company (AMAK), which has reserves of zinc, copper, gold and silver. AMAK IPO is planned two years after the company attains profitability. As operations are already profitable, an end-2014 IPO is likely, which will result in significant value unlocking.

Trigger Two - The Company operates its specialty chemicals operation through South Hampton Resources. To support petrochemical operations, the company has 127 acres of land at the plant site, 59 acres of which are developed. The company also...

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