National Australia Bank (ASX:NAB) is one of Australia’s “big four” banks, with a focus on regional banking, wealth management operations, international capital markets and institutional banking business. Brands within Australia include NAB and MLC, and the group is represented in New Zealand by Bank of New Zealand. In the UK the brands are Clydesdale Bank and Yorkshire Bank.

Financials stock, National Australia Bank released its first quarter trading update which showed 1Q FY12 earnings of approximately $1.4 billion, 8% higher than the previous corresponding period.

The bank said that revenue was driven by wholesale banking and to a lesser extent, MLC and NAB wealth.

NAB also revealed that it will undertake a strategic review of its UK operations, with a view to reposition the arm to deal with the current economic situation in the region.

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Downer EDI Ltd (ASX:DOW), provides engineering and infrastructure management services to the public and private rail, road, power, telecommunications, mining and resources sectors in Australia, New Zealand, Asia and the Pacific. Downer provides rolling stock services, drilling services for the exploration industry, mine planning and management services and highway maintenance.

Industrials stock Downer EDI today announced it has been awarded a six year magnetite mining contract with Karara Mining for provisions of services at its iron ore project in Western Australia.

The contract which commences this month has total estimated revenue of approximately $570 million over the six years.

CEO Mr Grant Fenn said the contract will enhance Downer’s exposure to the expanding iron ore sector and also increase its geographical presence in Western Australia.

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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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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.

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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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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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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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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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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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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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