MIDAS UPDATE: Shares sparkle as our gems tip Gemfields holds record ruby sale
Diamonds have always been a girl’s best friend, particularly at Christmas. But it seems that rubies have a growing appeal too.
Last week, coloured gem specialist Gemfields sold 63,000 carats (equivalent to more than two-and-ahalf stone) of uncut rubies for $43million (£27million) at auction, the most successful sale it has ever seen.
Midas recommended Gemfields in March 2012 at 29p and looked at the company in November of that year, when it bought the Fabergé brand. Today the shares are up 55 per cent at 45p and brokers believe they should hit at least 60p over the next year.
Jewel in crown: Actress Mila Kunis promotes the firm
Gemfields initially specialised in emeralds. It expanded into rubies two years ago and is scheduled to move into sapphires next year. It does not just mine for gems, it sells them in auctions and markets them, using actress Mila Kunis to increase their appeal.
The strategy works well and Gemfields is growing fast. Brokers expect profits to rise Brokers expect profits to rise substantially over the next couple of years, with further steady increases in sales and profits after that.
Midas verdict: Chief executive Ian Harebottle is determined to elevate the status of precious coloured stones and he is doing a good job. Investors should hold. New ones could buy on short-term weakness.
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