Three Penny Superstar Stocks Taking on the JSE in 2020
Because owning a portfolio of these three recovery shares now could be one of the smartest investment speculations you make in 2020.
Arbitrage – the closest thing you’ll get to guaranteed returns when investing
I’ll tell you about the exact opportunity you’ve got to make money in a moment. But first let me just explain an important investing term you need to understand first…
Arbitrage is a trade that gives you a profit by exploiting market inefficiencies.
For example, buying a share of a company that’s listed in London, and selling its South African listed stock on the JSE. This would work if there was a pricing mismatch between the prices of the share on the two stock markets.
This could be because traders in the one market haven’t adjusted the share price for fluctuating exchange rate, or it could be because investors in the different markets have different perceptions of risk.
Here’s an example of an arbitrage opportunity. Let’s say BHP sells on the JSE for R242, and on the Australian Stock Exchange it sells for $29.50 with the Aussie dollar trading at R10.44 – that means the BHP shares in Australia trade at R307.98 a share compared to South Africa’s at R242.
This means you would want to buy the shares in South Africa, and sell them in Australia. You’d make R65.98 a share this way.
Then there’s another form of Arbitrage, called Merger Arbitrage…
Here you look to making money from a company where an acquiring business offers say R10 a share, whilst the market price of the shares is only R8.
Since there is a probability the deal may not be approved investors are often scared of taking advantage of this arbitrage opportunity.
And that’s where today’s opportunity can be found.
In Just 7 Days You Could Have Banked 15.80% on Merck, 51.57% on Brent Crude and 323% on US 500!
And you could have made these gains from the smallest market moves – DOWN or UP!
Don’t miss your chance to pickpocket the financial markets for 3 months, totally RISK-FREE
You can unlock up to 30% on this opportunity if you move now
Metrofile Holdings is a JSE listed penny stock.
The company received a buyout offer from a consortium looking to delist the company and benefit from its strong cashflows.
The buyout offer is for 330c a share.
On Monday 9 March Metrofile shares traded as low as 254c. That means if you buy the share at 254c, and wait for the buyout to actually take place you will stand to make 29.9% on the share price!
Since then the share’s have risen, but it is still very volatile in the current market conditions. At the time of writing you could’ve picked it up at 273c – meaning 57c or 20.87% upside potential on the spot.
The buyout offer is 100% cash. The consortium is in advanced stages of securing finance for the deal.
And best of all, Metrofiles latest results support the consortium’s case for investing in Metrofile:
• Revenue increased 8%
• Operating profits increased 12%
• Headline earnings increased 26%
• Debt decreased 3%
In short – Metrofile isn’t the kind of company any investor should let slip through their fingers. And that’s why I expect there is very little reason why this deal won’t happen.
So, there’s easy profit on the table. And the nice thing is, if you wait for the buyout offer you receive the cash in your pocket without brokerage fees.
Here’s to unleashing real value,
Editor, Red Hot Penny Shares