Tuesday tips round-up: Kenmare Resources, Senior, African Barrick Gold

24th Jul 2012 06:58

Questor, the Telegraph's investment column, takes the brave step of recommending Kenmare Resources, despite it having falling an eye watering 29 per cent since the last buy recommendation in March. The company is a mineral sands producer, which are used to make things like paint. The whole mining sector has been hit by the slowing Chinese economy but Kenmare ought to benefit from the decision by Iluka Resources, the dominant market player, to reduce production, thereby increasing prices. Kenmare shares are trading at just 10.7 times forward earnings. Questor says buy.Tempus, in the Times, gives the thumbs up to engineering firm Senior. The group makes most of its money supplying components to the airlines industry. Orders are booming because of the combined 8000 planes Boeing and Airbus must produce in the next six years. The column points out for every Boeing 787 Dreamliner delivered, Senior makes $750,000. The shares stand at just 11 times forecast earnings for this year, Tempus thinks they will go higher.Tempus is less enthusiastic about gold miner, African Barrick Gold. It has decided to spend a small chunk of its $500m cash pile on a Kenyan asset, the first foray outside of Tanzania. The problem for the firm is that the price of extraction at its current mines is going up while the price of gold is going down. The cost of production in the second quarter was $950 per ounce, up nearly 50% on the prior year and too much for a buy recommendation. Leave for now.BSPlease note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.