Sunday share tips: Randgold, James Fisher, Quindell

27th May 2012 15:51

Questor was neutral on Randgold shares for some time, but recommended a purchase after the shares slumped 13 per cent following a military coup in Mali, where the company's flagship Loulo mine is to be found. The shares were at 57.65 pounds. However, since then the tumbling gold price and a weak set of first-quarter figures has ensured the price continues to fall. Earnings per share in the first three months came in at 94p, 13 per cent lower than consensus expectations. The fall was not down to the Mali coup, but was caused by production issues in Ivory Coast. The company's expansion plans should also lead to a significant rise in profits this year. Mark Bristow, chief executive, spent 652,478 pounds buying 13,480 shares at 48.40 pounds on May 18. Graham Shuttleworth, the chief finance officer, also spent 142,209 pounds buying at the same price. The shares are trading on a December 2012 earnings multiple of just 12.7 times, falling to 10.4, which is a significant discount to its recent rating. This reflects uncertainty over the gold price. However, Randgold's total cost of mining each ounce in the first quarter was 751 dollars. The shares look oversold and Questor says buy.James Fisher, the provider of specialist equipment and support for oil tankers, has warned investors that its strong performance in the first four months of the year should not necessarily be taken as a general indicator for the full year. After the group's trading update at the start of May, the shares jumped to almost 600p. They have already been as high as 615p this year. However, resurgent eurozone troubles have prompted a broad-based sell-off and the shares are now significantly below this level. There is no company-specific reason for the fall, other than the general market backdrop. Indeed, analysts have some punchy price targets on the shares, with the average forecast of the four analysts monitored by Bloomberg on this measure being 706¼p. Trading on a December 2012 multiple of 10.3 times, falling to 9.6, the shares remain a buy.Quindell owns a string of companies that help insurers to process claims more effectively, driving down their costs and delivering a better service to consumers. It is an attractive partner for large insurers because it offers a comprehensive range of claims management services. And having Ai Claims, Mobile Doctors and Silverbeck under one umbrella will drive down costs, so Quindell will not need to rely on referral fees and can charge insurers less than most rivals. The strategy is working and Quindell has already picked up business from Royal & SunAlliance and Ageas (formerly Fortis). Furthermore, chief executive Rob Terry is in talks with other leading insurers and a number of contracts are expected to be signed before the end of the year. The company delivered sales of £13.7m last year and profits of £6.7m. This year, brokers expect sales of £80m and profits of £28m, while in 2013, sales are forecast at nearly £300m with profits rising to more than £40m. Upwards revision of these figures is likely. Quindell shares are 5.63p and the company is valued at £145m. But Terry is determined to move the group to the main market over the next year and take it into the FTSE 100 within a few years. Brokers believe he can do it. Encouragingly, he has invested more than £12?mof his own money in the business. Buy, says The Financial Mail on Sunday´s Midas column.AB