LONDON (ShareCast) - Randgold Resources is the largest listed gold miner in the UK. The company is exploring in Burkina Faso, Côte d’Ivoire, DRC, Mali and Senegal. As well, Mark Bristow, its South African chief executive, has also said he would be interested in M&A. This is because valuations of smaller gold miners have plunged, which marks a departure from his usual strategy of explore-discover-build and is evidence of how far gold equities have fallen. There is country risk in Mali (although it has been waning) and in the DRC. However, Bristow is very experienced in working in such backdrops after building Randgold up from scratch. Furthermore, Ben Bernanke pulled the trigger on QE3 on Friday, which is positive for the gold price, as it weakens the dollar. This makes gold cheaper in other currencies. It also prompts fears of inflation - and gold is seen by many as a natural hedge. Credit Suisse said on Friday that its model suggested this round of QE could propel gold to $2,000 an ounce. Over the last year Randgold shares have – more or less – shadowed moves in the gold price. They are trading on a current-year earnings multiple of 21, falling to 16.8. This is not cheap, but the gold price is in the driver's seat. Buy, says Questor.

Shares in agricultural and farming group MP Evans rose on Friday, despite a significant slide in interim profits. Investors were focusing on future prospects. The most important contributor to profits is the group’s Indonesian palm oil business – and palm oil prices have been soft in the first six months. The group also owns a share in Australian cattle group NAPCo, which was impacted by falling beef prices. Palm-oil prices averaged $1,096 a tonne, 8% lower than the first half of 2011. However, a slump in pricing is not expected. Prices should be supported by the high price of its alternative, soybean oil. Production of fresh fruit bunches (ffb) rose 22% on its majority owned estates. Evans expects to produce 300,000 tonnes this year, rising to 500,000 tonnes by 2015. Questor last said buy when the shares were at 473.5p on April 18. They are trading on a 2012 earnings multiple of 14, falling to 12.3 and remain a buy, Questor affirms.

You would think that Olympic fever would have been good for online retailers. Who wanted to tear themselves away from the telly to shop? Yet for Ocado, the web grocer, this doesn’t appear to have been the case. Investors will find out on Thursday, when the company unveils third-quarter earnings. Barclays has pencilled in a slowdown in sales growth, from 13% to 11%. The Olympic effect, however, is a one-off. More pressing concerns remain. Can Ocado keep its lenders at bay while it struggles to establish a steadily profitable business? Through the first six months of the year, it eked out a pre-tax profit of £200,000. As it works out the kinks of its first big warehouse, and puts the finishing touches to its second, things should improve. Meanwhile, the company is getting dangerously close to breaching the terms of a £100m loan. Ocado is nearing the end of its big investment programme, and sales are on the rise, but if even if all goes perfectly, it is cutting it fine. Barclays said: “Our forecasts do not imply a breach of covenants, but nor do we expect much headroom. Ocado’s lenders may cut some slack to the company given the clear tipping point in view.” Fingers crossed, writes The Sunday Times´ Danny Fortson.

AB


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