Wednesday tips round-up: Randgold, Schroders, InterContinental Hotels
As most things have crashed down around the feet of investors in the past year, so gold has enjoyed a revival as investors flocked to safer ground. As such, Randgold Resources, possibly the biggest company you might never have heard of, has cashed in. The mining group is the only pure gold miner on the FTSE 100 and, with the price of gold shooting through the $1,000 per ounce barrier over the past few months, so its shares have soared. It certainly isn't cheap, but we think there is still value in Randgold. The Independent recommends the shares as a ‘buy’.Seven billion pounds is a sizeable sum — the stock market value, say, of a Wm Morrison or a WPP. But that is also the amount of new money pulled in by Schroders in the three months to September 30. Schroders’s private banking operations are exerting a drag and provisions for asset continue to flow through. But at Ł11.70, or 14 times 2010 earnings, it is not too late to buy, thinks the Times.
Compared with vaguely positive comments from one or two of its rivals, yesterday’s third-quarter trading update fromInterContinental Hotels Group (IHG) looked rather downbeat. Third-quarter numbers beat consensus forecasts but the tone of the comments sent the shares down 17˝p to 825p. The economic picture remains hard to call but IHG’s strong brands and US exposure should enable it to prosper when a recovery ensues. Despite a full-looking multiple of 18 times 2010 earnings, hold on, says the Times.
Yesterday’s 4 per cent fall in Babcock International should not disconcert. Shares in the engineering services group have risen by nearly one third since September, making it one of the few FTSE 250 companies whose price is now higher than when the credit crunch began. True, Babcock’s first-half numbers were not blemish-free. But Babcock as a whole continues to perform: pre-tax profits up 24 per cent, operating margins rising to a record 8.9 per cent and the interim dividend increased 20 per cent. At 619˝p, or 13 times current-year earnings, the Times thinks the shares are a ‘hold’.
Stefan Barden, Northern Foods' chief executive, told Questor on Tuesday that the company was committed to maintaining its dividend and he had a desire to improve the payout as profits improve. The shares are presently yielding an impressive 7pc. The shares are trading on a March 2010 earnings multiple of 11.1 times, falling to 9.7pc next year. They remain a buy based on their impressive yield and the company's investment for growth, says the Telegraph.
Today's Headlines
Babcock International Group (BAB) | Price: 616.00p | Change: -3.50% Investment Column:Babcock Tempus:Babcock International InterContinental Hotels Group (IHG) | Price: 825.00p | Change: -2.08% Tempus:InterContinental Hotels Group Northern Foods (NFDS) | Price: 65.75p | Change: 2.46% Questor:Northern Foods Randgold Resources (RRS) | Price: 4,577.00p | Change: -4.23% Investment Column:Randgold Resources Schroders (SDR) | Price: 1,175.00p | Change: 1.65% Tempus:Schroders Tottenham Hotspur (TTNM) | Price: 74.50p | Change: 0.34% Investment Column:Tottenham Hotspur |
| P/E: 14.8 | Div Yield: 2.3% 
| P/E: 11.7 | Div Yield: 3.2% 
| P/E: 8.6 | Div Yield: 6.8% 
| P/E: 15.5 | Div Yield: 2.6%
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