Wednesday tips round-up: Randgold, Schroders, InterContinental Hotels

As most things have crashed down around the feet of investors in the past year, so gold has enjoyed a revival as investors flocked to safer ground. As such, Randgold Resources, possibly the biggest company you might never have heard of, has cashed in. The mining group is the only pure gold miner on the FTSE 100 and, with the price of gold shooting through the $1,000 per ounce barrier over the past few months, so its shares have soared. It certainly isn't cheap, but we think there is still value in Randgold. The Independent recommends the shares as a 'buy'.

Seven billion pounds is a sizeable sum - the stock market value, say, of a Wm Morrison or a WPP. But that is also the amount of new money pulled in by Schroders in the three months to September 30. Schroders's private banking operations are exerting a drag and provisions for asset continue to flow through. But at £11.70, or 14 times 2010 earnings, it is not too late to buy, thinks the Times.

Compared with vaguely positive comments from one or two of its rivals, yesterday's third-quarter trading update from InterContinental Hotels Group (IHG) looked rather downbeat. Third-quarter numbers beat consensus forecasts but the tone of the comments sent the shares down 17œp to 825p. The economic picture remains hard to call but IHG's strong brands and US exposure should enable it to prosper when a recovery ensues. Despite a full-looking multiple of 18 times 2010 earnings, hold on, says the Times.

Yesterday's 4 per cent fall in Babcock International should not disconcert. Shares in the engineering services group have risen by nearly one third since September, making it one of the few FTSE 250 companies whose price is now higher than when the credit crunch began. True, Babcock's first-half numbers were not blemish-free. But Babcock as a whole continues to perform: pre-tax profits up 24 per cent, operating margins rising to a record 8.9 per cent and the interim dividend increased 20 per cent. At 619œp, or 13 times current-year earnings, the Times thinks the shares are a 'hold'.

Stefan Barden, Northern Foods' chief executive, told Questor on Tuesday that the company was committed to maintaining its dividend and he had a desire to improve the payout as profits improve. The shares are presently yielding an impressive 7pc. The shares are trading on a March 2010 earnings multiple of 11.1 times, falling to 9.7pc next year. They remain a buy based on their impressive yield and the company's investment for growth, says the Telegraph.

Glory, glory Tottenham Hotspur, is what they sing on the terraces of the football club's White Heart Lane ground. Yesterday, however, it was the club's investors, not the fans, who were singing the praises of Spurs after it reported a record full-year, pre-tax profit of £33.4m. The numbers yesterday were also boosted by player sales, which of course can impair performance. We would hold and wait to see how Spurs' season pans out, says the Independent.


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