My best shares to buy now are spread among many industries and across a number of markets. One FTSE AIM stock I like is Anglo Asian Mining (LSE:AAZ).
FTSE AIM opportunity
Anglo Asian Mining is a gold, copper, and silver explorer and producer that operates in Azerbaijan. It is a minnow in a lucrative and saturated sector. It possesses a market cap of approximately £165m.
When the market crash occurred last year, many investors turned towards commodities such as gold, which enjoyed strong performance. Gold was seen as a safe-haven asset to store value.
Anglo was very much a penny stock five years ago and was trading for as low as 9p per share. As I write, I can pick up shares for close to 142p per share. That is an astonishing 3,450% share price increase for the FTSE AIM incumbent.
It is worth noting too, that Anglo has comfortably surpassed its market crash low but has not quite reached its pre-cash highs. Its rise in share price and ability to grow is one of the reasons it is on my FTSE AIM best shares to buy now list.
Why I like Anglo Asian Mining
There are a few reasons I like Anglo. Firstly, it recently regained control of a mineral-rich area that was subject to a political dispute. Anglo announced that the end of a war between Azerbaijan and Armenia had seen one of its lucrative contracts restored. It also recently announced a five-year extension to one of its most lucrative contracts where it mines a lot of its materials.
Next, Anglo has seen year-on-year growth in revenue, profit, and cash reserves. Full-year results announced a few months back also made for positive reading. These results showed record revenues of over $100m as well as cash generation of over $38m which meant Anglo was debt free. These aspects play an important part in me selecting my best shares to buy now. I refer to debt levels, growth, and share price activity to name a few criteria.
Anglo has continued to pay dividends, which is another one of my key criteria. Many other FTSE firms have cancelled dividends to conserve cash. Anglo announced a special dividend at the end of January 2021 based on a record 2020. It already paid a dividend back in November 2020 too.
Best shares to buy now carry risks too
Firstly, Anglo is a rather small player. Although its rise to date is commendable, it can be out muscled and outmanoeuvred by larger firms out there. Secondly, it operates in a politically volatile part of the world. This could negatively affect operations and its balance sheet if things take a turn for the worse. Lastly, gold as a commodity long-term could be quite risky. Low interest rates have recently been helping its performance. A stock market rally could see investors become less risk averse and this could detract from gold’s standing as a safe-haven asset.
There is a lot to like about Anglo. It is priced well in my opinion, it is debt-free, and reported record revenues and cash generation for its last full-year period. I expect its growth journey to continue. Looking at the best shares to buy now if I had a spare £500 ripe for investment, Anglo would be a strong contender.
