Tuesday newspaper share tips: Randgold best of the miners to weather the storm

With equity prices falling on the first trading day of 2016, gold is being seen as a safe option and The Telegraph’s Questor believes Randgold Resources is the best of the gold miners to hold on to.

In Tuesday’s column, it said that the FTSE 100 company is the largest pure gold play on the blue chip market.

While gold prices rose on Monday, it highlighted the price is still low compared to the $1,900 peak four years ago, and Randgold is doing all it can to ramp up production.

Questor said the company isn’t immune to wider problems in the mining industry, with profits down in the three months to September, and the demand for gold dropping as China slows.

However, it believed the company is well placed to weather the storm with a strong balance sheet, no debts and $168m in cash.

“Looking out over the long term, Randgold is likely to be a survivor of the nuclear winter now facing the mining industry and, when it emerges, its market position will be enhanced,” Questor said, rating it at ‘hold’.

Over in The Times, Tempus was interested in Grainger’s plans announced on Monday to sell its equity release division.

The FTSE 250 landlord - the UK's largest listed residential lessor - reported it had exchanged contracts with Turbo Group Holdings to sell its Retirement Solutions business on or before 20 May, subject to Turbo gaining approval from the Financial Conduct Authority.

Gross consideration for the deal at completion was estimated at £325m, comprising £175m cash and the transfer of £175m debt to Turbo, secured by the assets sold.

Tempus noted the company’s restructuring is continuing, after it sold its 25% stake in its German joint venture for £34m, with difficulty in owning and administering assets there.

The latest deal involves retirement homes that are linked with schemes where owners can release some of the equity in return for cash.

“The rents from these are puny, £1 million in the past year, with another £5.1 million made from trading,” it said.

With the money used to pay down debt and invest in new rental properties, Tempus said it looks like a good way to play the property market through shares and rated it at ‘buy long term’.

“The refocusing at Grainger away from non-core assets and towards high-yielding residential property is paying off.”