Wednesday tips round-up: Lloyds Banking, Randgold, Peter Hambro

9th Sep 2009 06:35

Lloyds Banking shares' recent froth has been driven by the company's bold prediction that bad debts have peaked and hopes that it may be able to renegotiate terms of entry into the government's asset guarantee scheme.It may be that Lloyds Banking is the recovery play of the new century. There are plenty of traders who seem to think so. But the Independent would prefer to sit on the sidelines until there is clarity regarding the bank's intentions. The shares have been pushed high enough for its liking. So sell it says.Pure gold companies trade at the highest multiples in the market - and this is certainly true for Randgold. The shares are now on a December 2009 earnings multiple of 77 times, although this falls to 36 next year as production increases. Randgold is a great investment, says the Telegraph, but the high rating means it is just a hold.The Telegraph adds that Peter Hambro is now officially its preferred gold play. If you want to take a position in gold shares, you should now buy into the Russian-focused miner. It trades on a 2009 earnings multiple of just 17.1 times. For a gold company this is derisory. However, investors must remember that Peter Hambro is no longer a pure play on gold; it merged with its spin off Aricom earlier this year. Peter Hambro is a gold and iron ore company - and that's why it is not afforded the high rating of its rivals. Buy.The Telegraph also rates gold miner Centamin Egypt as a hold and silver specialist Hochschild Mining as a buy.Plant hire group Ashtead's tactic of cutting its US rental rates in order to protect volumes should serve it well. It has been able to take market share, from which it should profit when rates rise once more. There is also the prospect that US stimulus spending on infrastructure should begin to kick in from the middle of next year. Any recovery in residential construction would provide yet further momentum. At 89p, the shares are up more than 60%t since July, gaining 11% yesterday alone. But they have farther to go. Buy on weakness says the Times.It is a long time since the pub industry was enjoying a happy hour. As if the recession wasn't enough, it has had to put up with smoking bans, taxes, and, especially, supermarkets selling booze on the cheap. So yesterday's trading update from Greene King was reasonably encouraging says the Independent. Trading at 10.9 times full-year earnings, the shares are not overly expensive, and the prospective yield, at 4.4%, is good. Hold for now.The outlook for Greene King is far from clear, with unemployment and slowing wage growth hitting consumers in the pocket. But the recent £207 million rights issue leaves Greene King well placed financially. The shares, up 2½p at 483p, are trading on a multiple of 10.6 times 2010 earnings. Hold says the Times.Aim-listed pensions consultant Mattioli Woods offers advice to the sort of people who all too easily find themselves lost in the ever more complicated pensions maze. On 11.5 times next year's forecast earnings. the shares are not overly expensive and the prospective yield after factoring in yesterday's welcome dividend increase is good at 4.3%. Tentative buy says the Independent.Contractor Interior Services Group has a strong balance sheet (£32m of net cash), the chance of further Olympics contracts and a resilient retail fit-out division. For the dividend alone ? which is twice covered by earnings ? at 191½p, or six times forward earnings, hold on says the Times.Please 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.