A Thought about a stock - Resources - SASOL

In the world we live in and all the market experts we hear, it is sometimes difficult to decifer between the good and the bad analyst opinion(s). It is important to keep in mind that when someone says that you should buy a stock, that you really understand what they are saying. For example, if an analyst is saying that he suggest that we buy a specific pharmaseutical company because their new drug will hit the market soon and the price is expected to skyrocket. This may be true (don"t get me wrong) and in a few cases...is. You have to do some additional research first, for example: is this the only drug that the company has in its arsenal? If something were to go wrong with the specific drug, will the company still be a good and viable investment or will it go belly-up? etc.

Now to the stock in question and why I think that we should pay very close attention to it. SASOL is a South African compny and is a leader in its field. It focuses on many variaties of markets and products and as this is not advertisement I will not dwell for too long on every aspect (for more information visit: www.sasol.co.za). One of its main focus is on the production of fuel from alternative resources. As we know... this is a very talked about issue at the moment due to the high oil prices. What I like about SASOL though is that they actually already produce such fuels and chemicals and are already making a profit. This is very important to not that you would not be investing in a story but in a company that made profit and also employs more than 170000 people!

Statistically, I also think that it is the right time to invest in the company now. The company is listed on both the JSE (Johannesberg Stock Exchange) and the NYSE (New York Stock Exchange) which makes it easily accessible. On the NYSE the current price is around USD 36 and this is approximately EUR 28.50 with today's exchange rate. The price has rebounded a little after the losses it sustained in following the world market fluctuations over the last month or so.

I believe that this is a solid company and happens to be in the right sector at the right time and I would suggest that it makes a good addition to an energy-focused portfolio. Personally, I do not see much risk on the downside for this stock but the gains should also not be too spectacular. I would focus on a buy-and-hold strategy with this one... much like many people do with Gold with has correct dramatically over the last month and closed near the USD 550 mark on Friday but that's another story for another thought.

Enjoy the soccer...