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3 More FTSE 100 Shares That Surged 1,000% in 10 Years

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By Harvey Jones, The Motley Fool

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LONDON — Every investor dreams of that elusive 10-bagger, the stock that multiplies every pound or dollar you invest by 10. This doesn’t just happen with smaller companies: At least 10 FTSE 100 stocks have delivered a total return of between 1,000% and 2,000% over the [ast decade, according to research from Fidelity Worldwide Investment. Last week, I looked at the top 3 FTSE shares over the past 10 years. But the next three are almost as impressive. And they are …

Randgold Resources
There are more peaceful places to do business than Mali, but few more profitable. 

Over the past decade, Randgold Resources , a gold miner and explorer mostly based in the strife-torn African nation, has returned a dazzling 1,723%. Its strategy is to unearth multimillion-ounce deposits in the prospective gold belts of West and Central Africa and develop them into profitable mines. It currently operates four gold mines — Morila, Loulo, and Gounkoto in Mali and Tongon in Cote d’Ivoire — and is developing a fifth, Kibali in the Democratic Republic of the Congo. 

After enjoying a golden decade, its share price is down 23% over the past six months, and that’s despite reporting record production levels in 2012 and a 16% rise in full-year profits to $511 million. Even a 25% dividend hike didn’t help the share price shine, although on a current yield of 0.6%, this isn’t for income seekers. 

The falling gold price is a concern, as investors become less risk-averse. Political unrest is another worry, both in Mali and Cote d’Ivoire. But Randgold is hungry for more and has launched a hefty program of capital investment. The recent share-price dip looks like a buying opportunity, except I worry that gold’s glory days are now over. Despite its impressive portfolio of mines, this stock is too risky for me. Gold bugs will feel differently.

Tullow Oil
If gold isn’t your thing, what about black gold? 

Today’s second FTSE 100 multibagger is oil explorer Tullow Oil , which returned 1,600% over the past decade, making it a sweet 16-bagger. It enjoyed a solid 2012, with sales revenue up 2% to $2.34 billion, and full-year profit before tax up 4% to $1.1 billion. Net debt fell from $2.9 billion to $1 billion. Highlights included the discovery of a new oil basin in Kenya, the Ngamia-1 and Twiga South-1 wells, its fourth major discovery in six years. It also enjoyed success in Uganda and Ghana. 

Exploration will always be a risky business, and Tullow wrote off an eye-watering $671 million on failed exploration activities, a massive leap from the $121 million lost in 2012. Happily, its strong balance sheet should help it shrug off these losses, as well as fund the 40 exploration and appraisal campaigns in 2013, including new territories in Africa as well as Guinea, Greenland, Uruguay, and Mozambique.

You only have to look at the company’s earnings-per-share growth to see how volatile your holding is likely to be. It …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should You Buy These 5 FTSE 100 Shares?

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By Royston Wild, The Motley Fool

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LONDON — I have recently been evaluating the investment cases for a multitude of FTSE 100 companies.

Although Britain‘s foremost share index has risen 9.1% so far in 2013, I believe many London-listed stocks still have much further to run, while conversely others look overdue for a correction. So how do the following five stocks weigh up?

Wood Group
I believe that oil equipment services firm Wood Group  represents great growth potential at a reasonable price.

The firm’s 2012 results released yesterday showed pre-tax profits leap 43% to $363 million, driven by underlying revenues increasing 20% to $6.8 billion.

Wood Group expects all of its divisions to make headway in 2013, adding that conditions in the global energy markets are likely to remain favorable. Exploration and development spend rose 9% last year, and the company reckons that its prospects should remain solid over the long term.

City analysts forecast earnings per share to rise 31% this year. Earnings are then forecast to jump an additional 16% in 2014. This stellar profit growth is set to deliver ever-improving investor value, with a P/E ratio of 12.1 in 2013 projected to fall to 10.5 next year.

Wood Group‘s relative cheapness is underlined by a lowly price/earnings to growth (PEG) multiple, which is expected to come in at 0.4 and 0.7 in this year and next. A reading below 1 often represents excellent value.

CRH
I reckon that CRH  is chronically overvalued at current levels. The construction specialist’s shares have rallied to fresh highs above 1,500 pence in recent days, despite the precarious state of the European and North American building markets.

The group’s 2012 results released last month showed pre-tax profit dip 5% to 674 million euros due to enduring difficulties within the firm’s core Western markets. Revenues crawled just 3% higher to 18.7 billion euros.

City analysts predict a 60% earnings per share slide in 2013, before a 35% bounceback in 2014. This leaves CRH on P/E ratios of 20.5 and 15.2 for this year and next, which I consider nosebleed territory given the downside risks, particularly as the bombed-out markets of Europe continue to struggle.

The company is expected to offer a dividend yield of 3.8% and 3.9% for 2013 and 2014, respectively, above the FTSE 100 average of 3.5%. However, the potential for formidable earnings pressure could jeopardize any shareholder payouts, particularly with miserly coverage of 1.3 and 1.7 predicted for this year and next.

Randgold Resources
I expect shares in Randgold Resources  to head north as a combination of surging production levels over the medium term and ascending precious metals prices pushes earnings higher.

The company churned out 794,844 ounces of gold last year, up 14% from 2011 levels. This helped deliver record profits of $511 million, a 16% increase.

And Randgold is aiming to significantly increase output at its other assets to build future growth, particularly at its Kibali project in the Democratic Republic of Congo, which is due to start production in the fourth quarter. The miner hopes to …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Gold Shares Rising Strongly

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By Roland Head, The Motley Fool

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Gold’s slide slowed last week, and after climbing to a mid-week high of $1,617, gold on the April contract finished the week just 0.9% lower, at $1,572.

Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $64 billion SPDR Gold Trust , fell 0.4% to $152.44 last week, while London-listed Gold Bullion Securities  rose 0.03% to $151.84 over the same period. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 5.3%, while the value of SPDR Gold Trust shares has fallen by 5.9%.

Gold’s big movers
The share price of gold miners is closely linked to the price of gold, but it’s not always a perfectly matched relationship, and last week we saw the share price of several of the U.K.’s biggest listed gold producers start to recover, after being battered over the previous two weeks by falling metals prices and broker downgrades.

Russia-focused Polymetal International  gained 2% to 1,002 pence during the week, making it the top-performing big-cap miner. Polymetal’s gains followed the previous week’s news that the firm had acquired a new exploration license in Russia, covering an area with probable ore reserves representing 700,000 ounces of gold. The company believes these reserves will be cheaper to mine than some of its existing assets, boosting profitability at lower gold prices. Polymetal’s share price could also see further support from institutional fund buying over the next fortnight, as it is due to be added to the widely used STOXX Europe 600 index on March 18, 2013.

Randgold Resources  climbed 1% to 5,430 pence last week, against the backdrop of a falling gold price. News that Mali‘s gold production exceeded forecasts in 2012 and was not affected by the country’s civil war may have helped stabilize Randgold’s share price — in 2012, almost 75% of Randgold’s production came from its mines in Mali. The gold mining region of the country is in the south, which has not yet been affected by last March’s military coup or the subsequent conflict. Mali‘s Mines Ministry is forecasting that industrial gold production will rise from 46 tonnes to 53 tonnes in 2013, despite the ongoing problems.

New Gold  rose 1.7% to $9.26 last week, after the company released its fourth-quarter results last week, revealing that full-year production from the company’s four producing mines reached 113,000 ounces, with a cash cost of just $254 per ounce, considerably lower than the industry average. Quarterly cash flow was $106 million, the highest ever such figure for the company, contributing to record net earnings for 2012 of $199 million.

Shares vs. commodities
Shares in commodity companies have outperformed their underlying commodities many times over the last 10 years, thanks to their ability to magnify their gains through successful development of new resources. This free report from the Fool, “10 Steps to Making a Million From the Market“ contains some excellent tips on …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Shares to Rise Sharply if Gold Can Bounce Back

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By David O’Hara, The Motley Fool

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LONDON — In the last 12 months, gold is down 9.3%. This has damaged the profitability of precious metals miners. If gold can get back to its record highs, shares in these three companies could turnaround fast.

Randgold Resources
In the last three months, as gold has fallen 8.8%, Randgold Resources  shares have lost 18.7%.

Unlike some of the other large resources companies, Randgold is a pure play on gold mining. Like all such firms, its profits are geared to the price of the commodity that it is producing. From a quick look at Randgold’s recent trading update, a 10% increase in prices achieved would deliver an approximate 12% increase in gross profits.

The company recently announced a 25% increase in its dividend to shareholders. Profits and dividends are forecast to increase for the next two years running. Randgold shares are priced at just 10.4 times expected 2014 earnings.

Centamin
Centamin  has suffered recently from some legal difficulties that forced production to be halted at its mine in Egypt. However, operations have been running again as usual since December.

These challenges mean that in the future, Centamin’s share price will be heavily influenced by risk perceptions as well as the underlying gold price.

Analysts are forecasting 2013 earnings per share of $0.26. This puts the shares on a 2013 P/E of just 3.1. Although there is significant political and market risk, that looks very cheap. Centamin is more about Egypt‘s future than gold’s.

Antofagasta
Antofagasta  is the largest and most diverse of the three companies. Much of its production is copper but the company does have significant gold operations.

In the last three months, Antofagasta shares are down 16.9% as investors have taken fright.

In its most recent production report, Antofagasta announced that cash costs for the quarter were 14.3% ahead of last year. This could have a dramatic downward ratcheting effect on profits if output prices fall further.

Analysts expect 2013 EPS of $1.33, with a dividend of $0.49. That equates to a forward P/E of 12.5 and a yield of 2.9%.

If you have been losing money on your gold investments and are looking to diversify into a sector with better earnings visibility, then our analysts here at The Motley Fool may have found the share for you. The company featured in our free report “The Motley Fool’s Top Income Share for 2013″ is a rock-solid blue chip offering real upside potential and a large dividend yield — something that gold bars will never do. The report is 100% free and will be delivered to your inbox immediately. Click here to get this tip for 2013.

The article 3 Shares to Rise Sharply if Gold Can Bounce Back originally appeared on Fool.com.


David O’Hara has no position in any stocks mentioned. The Motley Fool recommends Antofagasta. Try any of our Foolish newsletter services free for 30 days. We Fools may not …read more
Source: FULL ARTICLE at DailyFinance