At the start of a new year traders and investors alike invariably look to the potential that the new horizon brings.

After a tumultuous 2011, this year that sentiment is even more pronounced as market participants put the last 12-months in their rear-view and look to better times ahead.

At Australian Stock Report we don’t particularly care for long dated predictions about the market as a whole – too much can change too quickly.

We are prepared however, to outline a few stocks that will make for interesting reading in 2012.

Below is a list of stocks to watch in 2012 and a brief outline as to why we think so.

QR National (ASX:QRN) / Asciano (ASX:AIO) – Both companies operate in the transportation industry and are highly leveraged to the mining sector. While they are in competition with each other, both can prosper with the mining boom likely to drive industry revenue. QRN and AIO are likely to experience strong growth from the Queensland area as the state’s coal output moves back into full swing after last year’s floods caused havoc with production.

ANZ (ASX:ANZ) – Our bank of choice is ANZ. While we can’t see an extreme decoupling in price between the big four over the next year, ANZ is our preferred exposure to this sector. ANZ has the second lowest P/E based on current earnings and has a dividend yield approaching 7%, which should provide some support for the stock at this level. The company also has the most exposure to the growing Asian region and one of the lowest exposures to the slowing domestic residential market.

BHP Billiton (ASX:BHP) / Rio Tinto (ASX:RIO) – These mining giants are poised for growth in 2012. Both companies were weighed down last year as the market factored in the effects of a possible hard landing in China. It is becoming more evident however, that any slowdown in the Chinese economy will be akin to a soft landing instead. The other factor that could buoy the mining giants is increased commodity prices due to the likely introduction of further monetary stimulus by the US Federal Reserve.

WorleyParsons (ASX:WOR) – Worley’s provides professional engineering and management services to the energy, resources and complex process industries. The company has significant leverage to the energy sector, specifically through its hydrocarbons (compounds founds in crude oil) division. The company will benefit from any oil supply/demand imbalance that drives up prices. Indeed, some analysts are predicting the price of oil will increase dramatically due to the political unrest in the Middle East. Higher oil prices will encourage the big oil companies to ramp up capital expenditure to the benefit of WOR. The company also has demonstrated an ability to land contracts with the major oil players, evidenced by its recent contract win for the Chevron project in Indonesia.

Saracen Mineral Holdings (ASX:SAR) – On the smaller side of the market, Saracen is a mid-tier WA gold producer that was added to the S&P/ASX 200 on the 28^th of December, 2011. This company has forecast gold production of between 120,000 -130,000 ounces of gold a year, which was reaffirmed in a recent update. Saracen is also trying to expand its business with $35 million of capital expenditure planned for the current financial year. The capital expenditure is substantial for a company of SAR’s size, but a strong net cash position of $58 million significantly reduces the funding risk.

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Liquefied Natural Gas (LNG), as the name suggests, is focused on liquefied natural gas (colloquially known as LNG) prospects locally and internationally.

The group is renowned for its Gladstone LNG Project at Fisherman’s Landing. The project boasts 18,000 PJ of uncontracted gas resources and is the lowest capital cost liquefied natural gas project in Gladstone (at around US$300/tonnes per annum).

The Gladstone LNG Project will remain the company’s major focus until achievement of targeted commercial operations in 2012.

As liquefied natural gas is in hot demand, Australian companies with exposure to the resource have drawn international interest.

LNG was one of the hot stocks in mid 2010, with its share price more than doubling in the month of July.

In a show of confidence, in late January China Huanqiu Contracting & Engineering Corp. agreed to acquire a 19.9% stake in the company.

Gladstone project

At present, the company is in the development progress on the planned three million tonne per annum (mtpa) LNG project at Fisherman’s Landing in the Port of Gladstone, Queensland.

The Gladstone Project will be the first coal seam gas (CSG) to LNG export project in the world and the first east coast of Australia LNG export project.

Located at Fisherman’s Landing, the Gladstone Project will benefit from local infrastructure, whilst the site area can potentially accommodate four trains at a guaranteed 6 million tonnes per annum (mtpa).

Stage 1 dredging and disposal approvals have been received, FEED is completed and a low-cost fixed price EPC proposal has been submitted.

The group has stated that LNG buyers are available, and it is focused on three partners.

China takeover

In late January, China Huanqiu Contracting & Engineering Corp. (HQCEC), an engineering unit of China National Petroleum Corp. (CNPC), agreed to acquire a 19.9% stake in LNG, the company.

CNPC is China’s largest producer and supplier of crude oil and natural gas.

The acquisition will make the CNPC unit the largest shareholder of the Australian firm. The parties would not disclose the value of the deal.

CNPC was eager to involve itself owing to the OSMR natural gas liquefaction technology offered by our Perth-based company.

The deal is a reflection of Chinese interest in Australian resource companies. CSG continues to be an in-demand part of the resource sector, and Australia in particular boasts a number of lucrative CSG regions.

December update

Though the company has yet to produce results, its December quarter report highlighted its focus on the deal with HQCEC, which constitutes a favourable turn for the group.

In the quarter the group continued to hold a 5% shareholding in Metgasco, and remains its largest shareholder.

The company also holds a 7.51 % shareholding in Oil Basins Limited (OBL). OBL has prospective oil and gas permit interests in the offshore Gippsland Basin of south-eastern Australia, the onshore Canning Basin of Western Australia and the offshore waters of the Carnarvon Basin.

The quarter also involved consideration by HQCEC and CNPC, or an affiliate of CNPC, as to their involvement in the Gladstone LNG Project, including direct investment in the project.

Outlook

As liquefied natural gas and coal seam gas continue to be a hot part of the resource sector, the company (LNG) stands to benefit from future production as well as international interest in its Gladstone LNG Project at Fisherman’s Landing, so it will be one of the stocks to watch in coming months.

China Huanqiu Contracting & Engineering Corp. agreed to acquire a 19.9% stake in the company last month. A major draw card was the Gladstone LNG Project, which is targeting commercial operation in 2012.

The company’s flagship project boasts 18,000 PJ of uncontracted gas resources and is the lowest capital cost liquefied natural gas project in Gladstone (at around US$300/tonnes per annum).

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