Headquartered in London, UK, the Anglo American Plc (AAL), is a leading global mining company that has operations and projects in multiple locations that span 6 continents: Africa, Europe, Asia, Australia, North America, and South America. The company was founded by Ernest Oppenheimer in 1917, in Johannesburg, South Africa. The name ‘Anglo American’ reflected the company’s early financial backers that came from the USA and the United Kingdom.
Anglo American has a diverse and strategic portfolio, with the company engaged in the exploration and mining of vital minerals and metals such as Diamonds, Copper, Platinum Group of Metals, Iron Ore, Metallurgical Coal, Polyhalite, as well as Nickel and Manganese. In Diamonds and Platinum, Anglo American is a global leader. Through its 85% equity in De Beers, Anglo American controls about a third of the world’s rough diamonds (in value); and in the platinum market, the company controls about 40% of global output. Anglo American has always purposed to maintain a quality and sustainable portfolio, and its products are some of the most essential raw materials in various industries such as electric vehicles, smartphones, as well as infrastructural development.
Anglo American is a conservative player in the Mergers & Acquisitions pool, with the company favouring organic growth through innovation and technology. Nonetheless, it has managed to complete lucrative deals such as the 2005 buyout of De Beers and the 2020 acquisition of Sirius Minerals. The company has also divested non-strategic assets such as the 2021 sale of its 33% stake in Project Carrejon, a deal that marked its exit from thermal coal operations. In recent years, Anglo American has purposed to be a responsible player in the mining sector. Its FutureSmart Mining blueprint informs its sustainability goals that include becoming a carbon-neutral company by 2040 as well as its commitment to healthy environments and thriving host communities.
Anglo American is listed on the LSE, where it trades under the ticker symbol AAL (LSE: AAL). AAL is a constituent of the FTSE 100 index. The company also has a cross-listing on the JSE, where it trades under the ticker symbol AGL.
AAL Stock History
Anglo American stock is quoted in GBX (British pence) rather than in pounds on the London Stock Exchange. At the turn of the millennium, the AAL stock continued the upward momentum of the late 90s and managed to print its all-time high around 5000p in February 2001.
The Anglo American share price would however fail to sustain the high levels, and it tumbled sharply to lows of below 1000p before the end of 2001. The subsequent recovery was slow and steady, with the AAL price rising to above 3500p by June 2008. However, the effects of the 2008 Great Recession triggered a correction to lows of circa 1000p by February 2009. The stock recovered again to above 3300p in early 2011, but it would fail to hold its own and it entered a long-term downtrend that saw it fall below 300p by January 2016. Since then, it has gradually edged higher and currently trades above the 3000p-handle, as of February 2022.
Anglo American is a willing dividend payer, with the company making payouts consistent with business conditions.
How to Trade Anglo American Stock
Here are some of the factors to consider when trading AAL stock:
- Legislative and Taxation Issues
As a major global player in the mining industry, Anglo American faces dynamic risks with regards to changes in legislation and taxation issues. The company has to deal with concerns such as the environment, mining takes, labour laws, and multiple other legal issues. Anglo American also has operations in 6 continents, and these issues may change drastically in different jurisdictions and massively impact the company’s bottom line.
- Negative PR and Lawsuits
Mining involves operations in the Earth’s deepest terrains, activities that can severely impact the environment. Even though Anglo American continues to work towards being a responsible miner, the company is still vulnerable to negative PR and possible lawsuits that may result in huge settlement fees. Negative headlines tend to weigh heavily on mining stocks such as AAL, with modern investors keen on having portfolio components that score impressively on sustainability.
Mining is a capital-intensive industry, but with stable profitability. This means that competition is fierce, and Anglo American has to deal with big rivals such as Glencore, Rio Tinto, Sempra Energy, and China Minmetals. Furthermore, competition also comes from numerous local distributors that have certain inherent advantages. In recent years, competition in the mining industry has come down to the use of advanced data technologies to reduce costs and boost margins.
- Periodic Earnings Reports
Anglo American’s fiscal year runs from January 1st to December 31st, and the company releases periodic earnings reports to update shareholders on the performance of the business. The important metrics to watch out for include revenues, Anglo American dividend per share payouts, debt levels, and free cash flow. Strong numbers will tend to inspire higher AAL stock prices, whereas weak figures tend to trigger lower stock prices.
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