Dragni Dragnev

Is America Resources Exploration Inc. (OTCMKTS:AREN) Worth Considering?

by Dragni Dragnev November 20, 2015

America Resources Exploration Inc. (OTCMKTS:AREN) made another impressive 29.44% jump yesterday – but is it as ripe for the picking as the pumpers claim?

As usual, the answer to that question lies in the trader's expectations.

If, for instance, one is looking to buy the stock of a company that promises stability, steady growth of investor value through the betterment of the company in the long term, then there may be better choices on the OTC Markets than AREN.

Suffice it to say that the value AREN has created for investors by actually working towards becoming a profitable company fails to impress. The last time it reported, the company showed investors a pretty grim picture:

  • cash and current assets - $145 thousand
  • current liabilities - $64 thousand
  • NO REVENUES EVER
  • quarterly net loss - $17 thousand

Of course, by now those numbers are severely outdated, but truth be told there is no evidence that the company can do better.

Moreover, experience teaches that all its significant chart movements are caused by pumps of various kinds, rather than the market's natural reaction to the company's growth.

Still, in spite of the company's apparent mediocrity, the volatility it demonstrated in the last two days is proof that there IS money to be made from trading AREN stock. If one plays his cards right, there could be profit to be found here. Admittedly, the relatively low dollar volumes make the possibility a bit more far-fetched, but that doesn't mean that it doesn't exist.

However, just like in gambling, there's a fair to good chance that said investors could be dealt a bad hand and be left with the consequences. The caveat emptor sign on the company's OTC Markets profile page did not end up there by chance.

Anyone who would exploit the AREN pump jump for profit needs to go into it with the full knowledge that such a ride can – and most probably will – end in disaster, just like any other OTC Markets pump jump.

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