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Obtala - good news from the farm: the shares are a buy

By HotStockRockets | Sunday 29 November 2015

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Obtala Resources (OBT) has announced the signing of heads of terms for a venture in which it will have a 70% interest to develop a commercial farming operation over an additional 1,265 hectares in Tanzania.

The new land – which is located only 15km from the company's existing horticultural project, allowing for significant synergies of manpower, management control, technology and logistics – will take the company’s total land held under lease agreements in Tanzania to circa 1,800 hectares and will see a banana plantation, mango plantation and Persian Lime tree orchard developed.

Having also recently announced a Memorandum of Understanding with an experienced international exotic fruit trading company, Obtala notes that trader has agreed to fund the cost of the banana seeds and will provide plantation experts, providing significant cost savings at the start of the new enterprise. 

Having been 8.25p when we updated earlier this month, the shares have slipped to 7.625p – though still up from little more than 6p in early October.

The rise from there particularly followed news of the commencement of a process to separately list the company’s Mozambique timber business on AIM and, with the potential timber valuation catalyst together with the agriculture potential which now looks to be opening up, our stance remains buy - the stock trades at a vast discount to what we believe to be its true asset value and the demerger should close that big time.

This material first appeared on Hot Stock Rockets  - sorry its paying customers first. Hot Stock Rockets will be serving up its next red hot share tip on November 30. To access the UK’s fastest growing share tipping website for less than £5 a month ( or for £5 for one month)   click HERE

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  1. Its turned into a jam tomorrow stock with vacillating management that cant decide if its a cannery , a retail business , a timber business or a farm crop business . Green field site cultivation farming is a night mare , pests and diseases decend from every where to ravage your crops and the hungry locals help them selves . ( ever wondered why spuds are not grown in fields near towns and cities ) It often takes two or three years to get the teething problems sorted …………. so this share comes with a health warning . Invest for the timber sale if you like risk .

  2. I’ll second wildrides comments ~ timber business spin off may release some value but as for the rest they’re flip-flopping all over the place. OBT need to decide what they are and focus on it.

  3. HSR Team. Could you shed any light on the decline of the share price please.

    Many thanks

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