Date: Wednesday 10 Apr 2013
LONDON (ShareCast) - Egypt-focused gold miner Centamin yesterday unveiled a better than forecast increase in production which - if sustained - could see the company beat its own guidance for the year. Unfortunately, it continues to be dogged by legal squabbles in the North-African country and a judicial process which is on the slow side of things. That is key as some claimants would like to see the company stripped of its only producing asset, the Sukari mine. As if that were not enough, over the last five months the price of gold has almost entered what some would describe as 'bear market´ territory, as it is termed when an asset falls by more than 20 per cent. Nevertheless, at just 3 times next year´s forecast earnings the shares are cheap but, of course, that reflects the uncertainty over the political and legal machinations in Egypt. Even so, The Telegraph´s Questor says hold.
The latest industry figures show more cautious hiring on the part of British employers, yet Robert Walters seems unaffected. That would seem to show that there is a two tier market in place, with high unemployment but a shortage of skilled staff. Be that as it may, the company has decided to hold off on opening new offices for the moment. Despite this, there are long-term profit growth drivers in place, but after this year´s run higher - and trading as they do at 30 times´ this year´s earnings - "that looks high enough, unless there are clearer signs of an improvement in the market," says The Times´s Tempus.
Lonrho, the conglomerate, is not expensive, but it has yet to deliver on its promises to shareholders. Further, in recent times - at least - it has shown a tendency to constantly go to shareholders ´cap in hand´ to meet shortfalls in its working capital requirements. Yes, the company should do well if it can execute, given its high ´operational gearing,´ but that same caharecteristic can also result in just the opposite should things turn out otherwise. Critically, in any case, it remains to be seen whether the company is on the cusp of finally delivering. Based on a current year earning multiple of 12.3, falling to 10.8 next year and just 5 in 2015, the rating is hold, Questor writes.
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