MIDAS SHARE TIPS UPDATE: Hold Petra shares - they'll shine bright like a diamond
Diamonds are one of the most costly gifts anyone can buy so prices depend hugely on economic conditions.
Having risen sharply in the first half of last year, their price fell as Christmas neared, hit by many global factors.
Last week, however, leading producer Petra Diamonds said things had begun to improve. The stock rose 13p to 188p as it unveiled strong interim profits and pledged to pay a maiden 2p dividend.
Share tip: Investors who bought in 2007 have had a rollercoaster ride but should stick with the stock
Midas last looked at Petra in November 2007, when the shares were at 148½p. Having fallen to 25p in 2009, the stock has recovered, but the best is almost certainly yet to come.
Petra's largest mines are Cullinan and Finsch in South Africa. Boss Johan Dippenaar is in the midst of a scheme to make them more productive by drilling deeper, raising output from 3.3million carats this year to 5million by 2019. This is long and costly, but Dippenaar is an experienced miner and the results should appear from next year, building steadily.
Brokers forecast a rise in profits to $153 million (£100million) in the year to June, rising to $206million next year.
Midas verdict: Investors who bought in 2007 have had a rollercoaster ride but should stick with the stock. Diamonds are a girl's best friend, the longterm outlook is good and Petra is well run. New investors could pitch in at this level.
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