The First African-focused Mutual Fund


What’s your favorite commodity-based African company right now?
Tullow Oil plc. (TUWOY)
–they have been the most successful oil and gas exploration business in Africa. The investment thesis for this stock is based on the company’s assets in Ghana and Uganda, where the most recent oil discoveries in Africa have been made. The size of the oil finds are estimated at 7 billion barrels of oil available.

The Ghana discovery is jointly owned by three companies: Tullow Oil, Kosmos Energy, and Anadarko Petroleum. They each currently own one-third of the discovery. Additionally, Tullow Oil has another recent discovery in Uganda. It owns 50% of that asset with a company called Heritage Oil.  Now Heritage Oil has recently decided to sell its 50% stake to Tullow, making it the sole owner of that asset. In Ghana they are looking to start pumping out oil by the end of this year. In Uganda it’s going to be 2011. Tullow is positioned to benefit from that given the fact that they are a large holder of those two assets. Their stock price right now does not reflect the value of those two assets.

So as a long-term call, it’s a very good company to own. In addition to that, Tullow continues to explore oil on the rest of the continent. Our 12-month price target is $11.

What’s a good way to capitalize on consumer growth on the continent?
SABMiller plc. (SBMRY) is a South African brewery company that started out in Cape Town and grew its business across the entire continent. It has been very successful at doing that and has since expanded outside Africa–with assets in Europe, the U.S., and Latin America. After this summer, the company is looking to benefit from the World Cup because it sells 90% of all beer in South Africa.

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