Australian Stock Report Share Tips

Shares to Buy: James Hardie Industries (JHX)

admin — Fri, 03 Feb 2012 04:11:42 +0000

James Hardie Industries (ASX:JHX) is a leading international building materials group that produces a wide range of fibre cement building materials used in the exterior and interior of residential and commercial buildings.

The company is also the largest seller of home siding (imitation wood) in the US, and produces fibre cement in the US, Australia, New Zealand and the Philippines.

Approximately 80% of JHX’s sales come from the housing industry, and the majority of this exposure is via the US housing market.

Although the US property crash has been a millstone on JHX, recent evidence suggests the market may have turned the corner.

JHX focus on efficiency and market share gains has placed it in an advantageous position to benefit from increased US housing activity.

US housing recovery

Although the US housing sector has been in a well established decline for much of the past five years, recent evidence is pointing to a long-awaited recovery.

Among the relevant housing indicators for James Hardie are housing starts and building permits.

Housing starts measure the number of new monthly building constructions, whilst building permits are more of a leading indicator in that they measure the number of new monthly residential building permits.

Since May 2011, both these indicators have been steadily rising in a sign Americans are beginning to take advantage of the country’s record low interest rates.

Furthermore, we see this momentum continuing due to the slowly strengthening US jobs market and the Federal Reserve’s pledge to maintain low interest rates until the end of 2014.

Operating results

In late November, JHX reported a 1Q12 net operating profit of US$41.2 million, which was double its result in 1Q11.

Despite reporting low demand, James Hardie was able to achieve its profit on the back of operational improvements such as a reduction in fixed costs, as well as an increased share of the fibre cement market.

This increased market share, positions JHX well in the event of an acceleration of the US housing recovery.

Outlook

JHX forecast FY12 net operating profit of US$126 – US$140 million. Although management was cautious about the outlook for US housing, recent data points to a noticeable pickup in this industry.

With US employment inching higher, housing affordability high and the Fed committed to a record low interest rate environment, there are enough incentives to drive continued improvement in residential construction activity.

We at Australian Stock Report believe that a focus on cost control and increasing market share has placed JHX in a strong position to leverage off any US housing recovery.

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Shares to Buy: James Hardie Industries (JHX) is a post from: Australian Stock Report Share Tips

Best Performing Micro-Cap Stocks Tips

admin — Thu, 02 Feb 2012 04:57:16 +0000

We launched our Speculative Report in mid-December 2011 to cater for traders looking to leverage small stocks to make big gains.

One of the unique features of the report is our Movers & Shakers page, which scans the market for the best short-term trading opportunities.

The page has been a great success, picking many of the market’s best performing micro-cap stocks over the last six weeks. Below is a list of 5 of the best stocks we have unearthed:

COMPANY: Peninsula Energy (PEN) is a small uranium developer, with projects in US, South Africa and Fiji. The company recently completed studies that confirmed the viability of two of its projects in Wyoming USA.

TRADE: We unearthed PEN in the report on the 20th of December when its share price was just 2.9 cents and the company had a market cap of only $62 million.

RESULT: PEN has since risen 83% to its last price of 5.3 cents.

COMPANY: Alliance Resources (AGS) is a small diversified exploration company, although its main focus is on uranium through its stake in the Four Mile uranium project in SA. The project has been subject to litigation regarding native title, and AGS shares have rallied strongly in the last six weeks after revealing litigation has been adjourned.

TRADE: We unearthed AGS in the report on 14th of December when it was trading at 21 cents with a market cap of $68 million.

RESULT: AGS has risen 71% since then to trade at 36 cents.

COMPANY: ZYL Limited (ZYL) is a small metallurgical coal explorer, working on a few coal projects in South Africa. In mid-December – the day we featured the stock in the report – ZYL advised the market that it had attracted some takeover interest and had hired Macquarie as its financial adviser.

TRADE: We unearthed ZYL in the report on 14th of December when it was trading at 14.5 cents and had a market cap of $60 million.

RESULT: ZYL has since risen 66% to 24 cents.

COMPANY: African Iron (AKI) is an emerging iron ore player, developing an iron ore mine in the Republic of Congo that is scheduled to start significant production next year. The company received a takeover offer earlier this month from South African miner Exxaro, which has bid up to 57 cents a share.

TRADE: We unearthed AKI in the report on 16th of December, when it was trading at 34 cents and had a market cap of $170 million.

RESULT: AKI has since risen 65% to 56 cents per share.

COMPANY: Golden Rim Resources (GMR) is small gold and copper explorer, operating in West Africa. The company has recently released drilling results from its exploration in Burkina Faso, which showed very high-grade intercepts.

TRADE: We unearthed GMR in the report on 20th of December, when its share price was just 10.5c and the company had a market cap of only $38 million.

RESULT: GMR has since risen 62% to its last price of 17 cents.

Our Speculative Report currently has an exclusive offer, reveive a BONUS 3 MONTHS FREE when you sign up for 12 months. Click to Register Your Interest & Receive Complimentary Reports Now!

Best Performing Micro-Cap Stocks Tips is a post from: Australian Stock Report Share Tips

Australian Mining Stocks News: Energy Resources of Australia (ERA)

admin — Wed, 01 Feb 2012 05:24:01 +0000

Energy Resources of Australia (ASX:ERA) is a uranium company which mines, processes and sells uranium oxide from the Ranger mine in the Northern Territory and uranium concentrates sourced outside Australia to nuclear electric utilities in Japan, South Korea, Europe and North America. ERA also provides environmental consulting services.

Australian shares, Energy Resources today announced that it will book a loss of $153.6 million for the CY11, compared to a profit of $47 million in CY10.

The company cited that production at its flagship mines was suspended for five months due to heavy rains.

Energy Resources is forecasting a uranium oxide output of between 3000 and 3700 metric tons for 2012, compared to 2641 last calendar year.

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Australian Mining Stocks News: Energy Resources of Australia (ERA) is a post from: Australian Stock Report Share Tips

ASX Blue Chip Stocks News: Woolworths (WOW)

admin — Tue, 31 Jan 2012 04:17:28 +0000

Woolworths (ASX:WOW) operates supermarkets, specialty and discount department stores, liquor and electronics stores throughout Australia. Woolworths also manufactures processed foods, exports and wholesales food and offers petrol retailing. The Company also operates hotels which includes pubs, food, accommodation, and gaming operations.

ASX Blue chip supermarket giant Woolworths today announced 2Q sales growth of 5.1% to $14.1 billion compared to the previous corresponding quarter, this was in line with market expectations.

The 2Q sales results bought the 1H FY12 sales to $29.7 billion, a 5% increase on the previous year.

WOW also announced that it will sell its Dick Smith consumer electronics business following a strategic review that was announced in November.

Since the review the company said it has received a number of unsolicited approaches in relation to Dick Smith.

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ASX Blue Chip Stocks News: Woolworths (WOW) is a post from: Australian Stock Report Share Tips

Small Caps Stocks News: CSG Ltd (CSV)

admin — Mon, 30 Jan 2012 05:09:27 +0000

CSG Ltd. (ASX:CSV) offers computer and other technology services. The Company offers information, technology, and communications project management and outsourced infrastructure support; applications development services; and sales of document management solutions and telecommunications services.

Small cap stock, CSG today announced that is expects NPAT for the half ending 31 December to be within the range of $9 million – $11 million, down from the $19.2 million in same half in FY11.

The company said the NPAT included a one off cost of $2.1 million in the last quarter of CY12.

CSG cited challenging trading conditions, but did expect an improved performance in the second half.

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Small Caps Stocks News: CSG Ltd (CSV) is a post from: Australian Stock Report Share Tips

Mining Shares to Sell: Mirabela Nickel (MBN)

admin — Fri, 27 Jan 2012 04:19:20 +0000

Mirabela Nickel (ASX:MBN) is a mining company focused on the production and sale of nickel concentrate.

The miner’s key asset is the Santa Rita nickel operation in Bahia, Brazil.

MBN achieved its production ramp up goals in 2011, successfully upgrading the Santa Rita’s plant capacity to 7.2Mtpa of ore milled, from 4.6Mtpa in 2010.

However the ramp up was also accompanied by rising cash costs, which detracted significantly from an otherwise solid set of December 2011 quarter production numbers.

Costly cash

Mirabela Nickel announced its December quarter production report today.

Nickel output climbed 9% from the previous quarter, helping MBN to meet its 2011 production target of 15,854 tonnes.

However the production numbers were overshadowed by a disappointing rise in cash costs.

Cash costs jumped 11% on the quarter to US$7.42, as the higher output was accompanied by higher plant costs and lower productivity.

Additionally, mining costs rose amid increased expenses relating to drilling activity.

The ramp up in quarterly production was thus poorly executed due to the company’s own efficiencies as well as industry cost pressures.

Risk on

Another concerning aspect of the production release was the almost 50% fall in MBN’s cash holdings from the prior quarter.

A significant part of that outflow was due to the closing out of the company’s nickel and copper hedges.

The lower cash balance in addition to a new US$50 million debt facility entered into by a Brazilian subsidiary, raises MBN’s risk profile in a period of economic uncertainty.

Outlook

MBN has raised its 2012 production guidance, targeting 20,000 – 22,000 tonnes of nickel output.

As mentioned, however, greater output is not necessarily a good thing when it is accompanied by higher cash costs.

Mirabela Nickel has commenced a cost reduction program, which aims to lower cash costs towards US$6/lb by the end of the year. However that is largely dependent on the proper implementation of the program.

Although a return to steady state production may help, cost reductions will also be linked to the favourable renegotiation of MBN’s major contracts.

Having recently closed out of its nickel hedges, MBN is now fully exposed to the movement in commodity prices.

Unfortunately, there is also considerable uncertainty surrounding nickel prices, with brokers Morgan Stanley and Goldman Sachs recently downgrading their forecasts amid concerns about oversupply.

We at Australian Stock Report believe these headwinds are likely to weigh on MBN’s share price for a while yet.

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Mining Shares to Sell: Mirabela Nickel (MBN) is a post from: Australian Stock Report Share Tips

Small Caps Stocks News: Alesco Corporation (ALS)

admin — Wed, 25 Jan 2012 04:02:14 +0000

Alesco Corporation (ASX:ALS) is small cap stock that is involved in the marketing and distribution of industrial products to the building and renovations, construction and mining, scientific and testing and automotive industries.

ALS distributes products such as cabinets and panelling, earthmoving and truck tires, garage door openers and laboratory testing equipment.

Alesco Corp today released their 1H FY12 results which showed a first half net profit of $7.2 million, in line with the market guidance provided in August 2011.

The company also reported an EBIT down 40% to $15.3 million, which included a trading loss on Parbury of $4.7 million

CEO Mr Peter Boyd said that given the market condition and earnings levels, each business generated solid cash flows and has solid growth opportunities for the future.

Alesco also announced a fully franked dividend of $0.03 per share up from $0.015 in the previous corresponding period.

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Small Caps Stocks News: Alesco Corporation (ALS) is a post from: Australian Stock Report Share Tips

ASX Energy Shares News: Oil Search (OSH)

admin — Tue, 24 Jan 2012 05:03:37 +0000

Oil Search (ASX:OSH) is an oil and gas exploration and development company that has been operating in Papua New Guinea since 1929 and is listed on the ASX 200.

The group now explores, develops and produces oil and gas in Papua New Guinea and Australia, not to mention Yemen, Libya, Iraq and Tunisia.

Oil Search released its fourth quarter production figures today, which showed it produced 1.64 million barrels of oil in the Q4 up 10% on Q3, but down 14% from the year earlier.

The company said that it produced 6.69 million barrels of oil in CY11 compared to 7.66 million in CY10.

However OSH said that its revenue increased to US$654.3 million in CY11 from US$517.3 million in CY10, helped in part by a rise in the average realized price for oil.

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Gold Stocks News: St. Barbara Ltd (SBM)

admin — Mon, 23 Jan 2012 04:40:10 +0000

St. Barbara Ltd (ASX:SBM) is a gold exploration and production company. The Company’s exploration projects include its Southern Cross and Leonora Operations which are located in Western Australia.

ASX Small Cap stock, St Barbara today released production figures for the fourth quarter revealing a production increase of 18% compared to the previous quarter.

The company said in a statement that the increase was due primarily to stronger milled volumes and the higher grade of ore mined.

SBM said exploration drilling will increase in the second half with the exploration budget set to increase by $6 million for the year to $22 million.

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Gold Stocks News: St. Barbara Ltd (SBM) is a post from: Australian Stock Report Share Tips

Australian Stocks to Buy: QR National (QRN)

admin — Fri, 20 Jan 2012 03:57:55 +0000

QR National (ASX:QRN) is Australia’s largest rail freight operator and the world’s largest rail transporter of coal from mine to port for export markets.

QRN is a provider of specialist rail engineering, construction and maintenance services in Australia, operating a network of five terminals and more than 40 depots across five states.

The company not only transports minerals but agricultural goods, and is a significant transporter of grain.

Since being privatised by the Queensland government in November 2010, QRN has been a stock to watch with a large percentage of retail shareholders.

QRN has faced some major headwinds since listing, principally the early-2011 flooding and cyclone in that state.

However, the company proved its resilience by managing to record a healthy FY11 underlying profit despite the impact to coal volumes from the floods.

The expansion into the WA and NSW markets also positions the company well for future growth.

Profit shines despite floods

QRN delivered an FY11 net profit of $349.5 million, which compared to a $36.8 million loss a year earlier when it was still owned by the Queensland government.

QR National faced a number of difficulties last year due to the Queensland floods, yet still managed an 11% lift in revenue and a 35% rise in underlying EBIT.

The growth in earnings was achieved due to the company’s focus on cost management and better revenue quality (more customer-focussed contracts).

With a net gearing ratio of less than 10% at the end of FY11, QRN’s balance sheet was in strong enough shape financially to pursue growth initiatives.

Volumes down, but significant growth potential

The Queensland floods had a big impact on QRN’s coal haulage volumes, and the company is yet to fully recover from the damage.

The slow recovery in Queensland coal volumes necessitates an ongoing focus on cost initiatives as well as pursuing new growth opportunities.

The company has recognised the importance of that second point, and is looking to expand its presence in the NSW Hunter Valley coal region and WA’s lucrative iron ore market.

QRN recently signed an iron ore haulage contract with the Karara Iron Ore Project, which is expected to deliver $900 million in additional revenue over the next ten years.

That is not say QRN has forgotten its core Queensland market. Asciano and QRN recently signed a multi-year deal with Rio Tinto to haul millions of tonnes of coal from its Queensland mines.

Importantly, this deal will leverage QRN’s $1.1 billion project to expand the Goonyella-Abbot Point rail network link.

Outlook

QRN’s management has thus far proven its ability to grow earnings in periods of turbulence.

A focus on improving operational efficiency paid dividends for the company in FY11, and given the slow recovery in Queensland coal haulage, we would look for similar diligence this year.

Along with cost initiatives, QRN is positioning itself for growth via the Goonyella-Abbot Point project and its expansion into the WA and NSW mining industries.

In our view, the positive momentum will translate into more near-term growth for QRN.

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Australian Stocks to Buy: QR National (QRN) is a post from: Australian Stock Report Share Tips