December 23, 2010
Australian Stocks to Watch Foster's Group (FGL)
Foster’s Group (FGL) is a brewing and wine company with a global presence, and whose core operations include Carlton and United Breweries, Beringer Blass Wine Estates, and Fosters International. Foster's Australia is involved in the manufacture and sale of beer, spirits, ciders and other beverage products. The company also operates four major breweries across Australia. On 22 December, FGL confirmed that current CEO, Ian Johnston, will leave his post once the separation of the company’s beer and wine businesses is complete. The group also appointed the board members and CEOs of the two divisions, which are expected to be separated by the first half of calendar 2011. As a result, FGL will be one of the stocks to watch in the early parts of next year.December 22, 2010
Atlas Iron (AGO) Takeover of Giralia Resources (GIR)
Atlas Iron (AGO) is an emerging iron ore producer and explorer, and has been one of the market’s hot stocks in recent months. With a growing number of high quality iron ore projects and one of the largest landholdings in the lucrative Pilbara region, AGO is now one of the area’s largest iron ore producers. The company’s significant projects include the Pardoo operation, the Ridley project and the Mt Webber Direct Shipping Ore (DSO) project, in the Pilbara region. On 21 December, AGO made an $828 million takeover offer for junior iron ore explorer, Giralia Resources (GIR). The implied price of $4.57 per represents a 53% premium to GIR’s closing price yesterday. GIR shareholders can either accept 1.5 AGO shares per every GIR share, or 1.33 AGO shares and 50 cents per every GIR share. GIR’s board accepted the offer and the company’s share price skyrocketed 39.8% today. AGO shares dropped 1.4% amid fears the offer price was too high. Keep up to date with AGO and all ASX takeover news and analysis with a free trial.December 21, 2010
Health Care Stocks News Ramsay Healthcare (RHC)
Ramsay Healthcare (RHC) is Australia’s largest private hospital operator, with approximately 30% of the market share. RHC facilities cater for a broad range of health care needs from day surgery procedures to highly complex surgery, as well as psychiatric care and rehabilitation. The group boasts over 100 hospitals and facilities spread out over Australia, the UK and Indonesia. On 20 December, Ramsay Healthcare announced that its first half result for the six months ended 31 December 2010 is likely to be 26%-28% higher on year. This was due to a better than expected performance in the Australian business and a slightly better than expected performance in its UK business. This has also translated into an upgrade in FY11 EPS growth of between 18% to 20% following a core NPAT guidance of 22%-24% growth. RHC soared 4.6% on the day of the announcement, making it one of the top stock performers in the Australian share market. Sign up to a free trial to receive daily RHC and Heath Care Stocks Recommendations.December 20, 2010
Hot Stocks Boart Longyear (BLY)
Boart Longyear (BLY) provides integrated drilling services and products to the minerals, environmental, infrastructure and energy industries. Most of Boart's revenue comes from key mining markets; Australia, Canada and the United States. BLY has been one of the hot stocks this month, surging from $3.70 to be currently trading around $4.40 On 17 December, BLY upgraded its FY10 earnings forecasts. BLY now expects full year revenue to be approximately US$1.45 billion, with EBITDA to be at least US$220 million. Boart Longyear based its upgrade on improved pricing, margin enhancement, and demand for its new products and drilling services. The group also announced the completion of a supplemental credit facility totalling US$85 million. BLY finished up 1.2% on the day of the announcement, making it one of the better performers in the stock market. Sign up to a free trial to receive up to date advice on BLY and all Hot Stocks.December 17, 2010
Gold Stocks to Buy Saracen Mineral Holdings (SAR)
Saracen Mineral Holdings (SAR) is an Australian mid-tier gold producer. The company became a producer when production began in April from the Carosue Dam gold project, 120km north-east of Kalgoorlie in Western Australia. Current gold production is from the Porphyry and Whirling Dervish open pit mines. SAR has only just made the leap to producer, but as its quarterly results demonstrate, the company is already delivering increasing gold production from its flagship Carosue Dam operations. Carosue cruising along Carosue Dam’s 2.4 million tonne per annum (mtpa) processing plant is forecast to produce approximately 100,000 to 120,000 ounces of gold in FY11. SAR is targeting an increase in production to around 160,000 ozpa by 2015. Gold resources at Carosue stand at around 3.3 million oz while reserves stand at around 0.9 million oz. Saracen’s Carosue Dam operations area contains a large number of known gold deposits within four separate districts (the Carosue Dam, Porphyry, Safari Bore and Red October districts). SAR is forecasting future production from open pit mines at Karari, Enterprise, Wallbrook and Deep South, and, subject to positive feasibility study results, underground operations at Porphyry, Red October and Deep South. Project development for a trial underground mining operation at Red October is presently underway. Looking golden SAR’s tenement holdings and gold deposits are located in one of the world’s most prospective gold provinces. In excess of 23 million ounces of gold in resources have been found and/or brought into production in this province, where SAR is building a long-term strategic infrastructure and resource position. As at 30 June 2010, SAR’s gold hedging position stood at put options bought over 154,347 oz, and call options sold over 90,810 oz, all at an exercise price of $1,250 per ounce and expiring in monthly amounts through to December 2011. SAR is fortunate in that its commodity of choice – gold – is experiencing a “golden” run over the months, and currently sits at around US$1,400 per ounce. As a result, Australian gold miners have been among the hot stocks this year as investors look to gain exposure surging bullion prices. The precious metal has repeatedly hit record highs on demand from China. Even though China is currently in the midst of battling inflation, the country is buying large amounts of gold and creating demand for SAR’s services. Pumping production In its first full production quarter, being the quarter ended 30 June 2010, Carosue Dam operations produced 25,036 ounces of gold, from the processing of 520,214 tonnes of ore grading 1.62g/t. Most of the ore was sourced from the Porphyry open pit mine. Saracen’s second open pit mine, at Whirling Dervish, supplied first ore to the plant in June 2010. For its more recent (September) quarter, gold production totalled 27,233 ounces at a cash cost of $705 per ounce. The quarter saw gold resources increase by 8% to 3.3 million ounces and gold reserves increase to 0.9 million ounces. SAR clocked mine operating profit (excluding hedging losses) of $11.3 million for the September quarter. Impressively, over the quarter Saracen Mineral Holdings saw its Million Dollar operation gold resources increasing 55% to 327,000 ounces. Drilling at Million Dollar is continuing whilst SAR is focused on an exciting broader $12 million drilling campaign, targeting numerous brownfields and greenfields targets. Outlook Saracen Mineral Holdings has only just made the leap to producer, but as its quarterly results demonstrate, the company is already delivering increasing gold production from its flagship Carosue Dam operations. The company is looking at a successful future as a mid-tier gold producer, which will be boosted by the development of its various operations in the lucrative West Australian gold districts. This bullish outlook means SAR will be one of the stocks to watch in coming months. Click for a free report to receive daily SAR and stocks to buy advice.December 16, 2010
Shares to Sell Billabong (BBG)
Billabong (BBG) is a major international retailer whose core business is the marketing, distribution, wholesaling and retailing of apparel, accessories, eyewear, wetsuits and hardgoods under various brands. BBG has been one of the shares to sell in 2010 amid declining consumer demand brought about rising interest rates and financial market volatility. On 15 December, BBG downgraded its first half profit guidance. The group now expects 1H11 net profit to fall 8% - 13% from a year ago, compared to its previous guidance of only a slight fall. 1H11 EBIT is expected to slump 25% on-year, primarily due to unseasonable weather impacting sales and weaker-than-expected consumer spending patterns in Australia. Furthermore, sales in the US have been impacted by a shift in seasonal orders, which will push expected sales into the 2H10. As a result, Billabong is now forecasting full year net profit to be flat on-year, compared to the previous 2% - 8% growth. BBG shares sank 8.9% on its revised guidance, making it one of the worst performers in the Australian share market. Access a free report for daily advice on BBG and shares to sell.December 15, 2010
Mining Stocks News PanAust (PNA)
PanAust (PNA) is junior miner that holds mineral assets in the Laos and Thailand. In Laos, PNA operates the large Phu Kham copper-gold operation, which commenced production of copper-gold concentrate in April 2008. ON 14 December, PNA increased its 2010 production guidance to 67,000 tonnes of copper, from the previous 65,000 tonnes. Cash costs are also expected to decline to US$0.90/lb from the previous range of US$0.95/lb – US$1.05/lb. PNA based the upgrade on strong quarter to date production at its flagship Phu Kham Copper-Gold Operation in Laos. PanAust also forecast EBITDA of US$260 million on the assumption that production will exceed sales in the final quarter of the year. PNA flew 10.7% on the day of its guidance, making it one of the best performers in the stock market. Receive up to date news and advice on PNA, mining stocks and more with a free trial report.December 14, 2010
Stocks to Buy Monadelphous Group (MND)
Monadelphous Group (MND) is a leading engineering group providing extensive engineering construction, maintenance and industrial services to the mining, energy and infrastructure sectors. The group boasts a simple company structure, with well-defined business groups, and has one of the market’s cleanest and appealing balance sheets. MND’s stock fell hard over the second half of 2008 as the mining sector in general was punished. However, the mining services industry is seeing the pressure lifting, and MND boasts a strong order book. MND reported excellent FY10 results, including a record profit after tax of $83.2 million and record sales revenue of $1.28 billion. Blue chip clients MND works with core markets in the resource industry, specifically iron ore, coal and mineral processing. However the company has also smartly diversified into oil and gas, water and power, where it continues to build a strong reputation for engineering excellence. The iron ore sector has been booming of late on the commodities recovery and Australia boasts a sizeable chunk of the global ore market. MND has delivered some of the iron ore industry’s largest engineering construction projects for BHP Billiton Iron Ore and Rio Tinto Iron Ore, resulting in repeat business. MND’s structural, mechanical and piping contract for BHP Billiton’s Rapid Growth Project 4 at Newman Hub, valued at approximately $290 million, represents the group’s largest single contract awarded to date. The company’s excellent track record has resulted in recurring business and preferred supplier status with blue chip customers in the coal sector including Rio Tinto Coal and Allied, Anglo Coal and BHP Billiton. The company is also a major force in Australian projects in the oil and gas sector, with recent or current projects including the BP Kwinana Refinery Turnarounds and Capital Projects (Western Australia), the Darwin LNG Maintenance Services Contract and Oil Search’s (OSH) Field Facilities Construction Services Contract in PNG. Another year of growth In August, MND reported its FY10 results – including a record profit after tax of $83.2 million, up 12.1% on the prior year. Strong revenue growth was achieved across the company’s operations and in all key markets − resources, energy and infrastructure − with total sales revenue for the year increasing by 13.6% to a record $1.28 billion. Underlying earnings for the year were $129.4 million, up 11.5% on FY09. Earnings per share (EPS) rose 10.7% to 96.9 cents. A final dividend of 48 cents per share was declared. This takes the total full year dividend payout to 83 cents per share, up 12.2% on year. Whilst lower than the previous period, solid operating cash flow performance continued to be a feature of MND’s business in FY10, and the company reported a net cash position of $116.6 million at year-end. Fantastic future At its recent AGM, MND confirmed that, since June this year, tendering activity has continued to be healthy. Late last month, MND announced to the ASX three new construction contracts and additional work with a combined value of approximately $130 million. These agreements take new construction and services contracts so far this financial year to about $400 million. Following the achievement of record sales and earnings in FY10, MND has entered FY11 with a healthy forward workload. The company has continued to experience a high level of demand and growth from existing contracts and expects revenues in 1H11 to at least match those of the 1H10. Given this potential, MND will be one of the stocks to watch in the coming year. Outlook Monadelphous Group is a heavily diversified resources company which stands to benefit from commodities growth across the board, in line with a global economic recovery. The company’s FY10 results were strong and FY11 is looking healthy already, with new construction and services contracts so far totalling $400 million. We also expect expansion opportunities in the water and solid waste management markets, along with the newly acquired transmission pipeline business, to provide MND with ongoing growth opportunities. Receive daily stocks to buy advice with a free 7 day report.December 13, 2010
Energy Shares News Caltex (CTX)
Caltex (CTX) is Australia's leading transport fuel supplier and convenience retailer and the only integrated oil refining and marketing company listed on the ASX. CTX operates two major refineries, at Kurnell in Sydney, and Lytton in Brisbane. CTX also operates a convenience store network in association with service station sites. CTX has been one of the hot stocks in recent months, surging from around $9 in July to be now trading around $14.40. On 9 November, CTX announced that it expects FY10 underlying profit to fall by 7% due to a strong Aussie dollar and a maintenance-related shutdown at one of its refineries. CTX expects operating profit (which excluded the impact of oil price volatility) to be between $285 million and $295 million, compared to last year’s $203 million. The stronger Aussie dollar was expected to wipe $65 million from Caltex’s refinery margins from 2009. CTX declined 0.6% following that day’s profit warning. Sign up to a free trial and receive daily shares advice including Caltex.
December 10, 2010
Stocks to Buy Atlas Iron (AGO)
Atlas Iron (AGO) is an emerging iron ore producer and explorer. With a growing number of high quality iron ore projects and one of the largest landholdings in the lucrative Pilbara region, AGO is now one of the area’s largest iron ore producers. The company’s significant projects include the Pardoo operation, the Ridley project and the Mt Webber Direct Shipping Ore (DSO) project, in the Pilbara region. Following the commencement of mining at Wodgina in June 2010, AGO is on target to ramp up iron ore exports from 1 million tonnes per annum (Mtpa) to 6Mtpa during the December 2010 quarter. AGO is on target to achieve its growth target of exporting at a rate 12 Mtpa by the end of 2012. Iron ore roar As an iron ore explorer/producer, AGO is well placed to benefit from continued strength for the iron ore market. Chinese demand has been driving up the price of iron ore over the past few years and prices have gone wild. Spot iron ore prices in China have extended gains after domestic steel prices added strength this week and iron ore miners continued raising offers and tightening supply. At the recent Steel Index conference, the global seaborne supply of iron ore is anticipated to rise 8.5% to 1.1 billion tonnes next year. AGO boasts multiple iron ore port options at Anketell, SW Creek, Utah and Oakajee, and has six off-take agreements with more to come in FY11. Recent developments In June, AGO announced the commencement of its Wodgina DSO Iron Ore Project in WA. With the commencement at Wodgina, AGO is expecting combined iron ore exports at its Pilbara operations to total 6 Mtpa by December 2010. In September, AGO excited the market by confirming a 50% increase in reserves at its north Pilbara Projects. In the same month AGO loaded the first iron ore from its Wodgina and Pardoo mines, onto the Bergen Max export vessel at the New Utah Point Port in WA. AGO advised that the port is at the heart of its plans to ramp up production to 6Mtpa by Christmas, and then 12Mtpa by 2012. AGO signed up with mining sector bigwig BHP Billiton on 18 November, entering a memorandum of understanding (MOU) on iron haulage and port access at Port Hedland. The two miners said the talks involve hauling iron ore from AGO’s Pardoo mine via BHP’s Goldsworthy rail line. AGO has been one of the hot stocks since these developments, and has continued to climb on rumours of receiving multiple approaches from Chinese parties interested in buying the company's Balla Balla iron ore project in Pilbara. Quarterly results AGO’s most recent results are for the September quarter. It was a landmark quarter, with first ore-on-ship at the new Utah Point port facility, commenced mining at Wodgina and production ramp up at Pardoo. Over the quarter, 313,719 ore tonnes were shipped; 612,649 ore tonnes were processed; and 774,653 ore tonnes were mined. DSO Reserves increased by 50% and AGO completed a merger with Aurox Resources in August, allowing for a greater expansion of port facilities. AGO finished the quarter with $108 million of cash on hand at 30 September - which has increased to $120 million at 25 October. Outlook As the iron ore market returns to robust boom times, AGO is taking advantage of current conditions, ramping up some projects and making great sales of others. AGO has a very healthy balance sheet, with $120 million cash on hand, and is free of net debt. Going ahead, AGO will continue to explore Pilbara for further opportunities to add to its already-impressive project portfolio and will focus on mining at Wodgina and production ramp up at Pardoo. As a result, AGO will be one of the stocks to watch in coming months. Sign up for a free trial to receive daily AGO and stocks to buy advice.December 9, 2010
Industrials Stock News Downer EDI (DOW)
Downer EDI (DOW) specialises in the engineering, construction, telecommunications, mining and resource sectors in Australia, New Zealand and the greater Asia Pacific region. DOW has been one of the shares to sell in 2010 as it contended with falling profits and major problems with its Waratah trains project. On 8 December, DOW announced further delays in the delivery date of the first of its Waratah trains to RailCorp. DOW now expects the first Waratah train to be delivered following the completion of a number of tests in January. The damages payable by DOW were included in the $190 million provision previously announced on 1 June. Sign up to a free trial to receive DOW and Industrials Stocks news, analysis and advice.December 8, 2010
Australian Stock News Stockland (SGP)
Stockland (SGP) is one of Australia's largest, most diversified property groups. SGP holds a portfolio of retail, commercial, residential, industrial and hotel properties across the country. SGP has been one of the shares to sell in recent months, dropping from around $4.08 in early September to be now trading around $3.70. On 7 December, SGP announced that it had won the right to develop a masterplanned community at the Lockerbie site north of Melbourne. The Lockerbie site is worth $4 billion, whilst the proposed masterplan includes around 11,500 residential lots and an 85 hectare city centre. The land is expected to be brought to the market over the next 30 years, with first settlement due in late 2014 or early 2015. Recieve free Stockland and Australian Stock News and recommendations with a trial report.December 7, 2010
Shares to Buy Blackmores (BKL)
Blackmores (BKL) is Australia’s leading natural health brand, providing natural health products such as men’s and women’s multivitamins. BKL boasts the number one brand in Australia and Thailand, outperforming the market in all of its major territories. BKL’s products span Australia, Malaysia, Thailand, Singapore and Hong Kong. BKL’s products are supported by the backing of healthcare professionals and key opinion leaders – making BKL the top brand used by GPs in Australia. A strong year For FY10, BKL delivered impressive results. Revenue increased 7% on the prior year to $215 million, whilst underlying earnings grew by 25%. Net profit after tax (NPAT) of $24 million represented a 17% on-year increase, whilst EPS was up 15% on FY09. BKL declared a final dividend of 70 cents, up 23% on FY09. BKL noted that its underlying earnings increased significantly in a “year of investment”. The results were supported by the group growing its Asian business, leveraging operational efficiencies from a new facility, and driving innovation. New products, higher profits BKL excels in bringing new natural health products to the market that find immediate success amongst consumers and support amongst healthcare professionals, including GPs. New products such as Everyday Stress Formula and Odourless Fish Oil + Vitamin D3 have proven popular in Australia over FY10 and coming into the new FY. In Asia, the Omega range of concentrated fish oils in Hong Kong have become a success, as has Joint Formula in Singapore. BKL released more than 80 new products in FY10, including a range of heart health products, Blackmores Sleep Sound, and Cold & Flu Day/Night. BKL will be one of the stocks to watch in FY11, with its healthy pipeline including Everyday Stress in 1Q11 and two innovative probiotic products in 2Q11. Earlier this month, BKL confirmed it was expanding its international presence further via a partnership with CJO Shopping, a major Korean home shopping network, incorporating TV, online and catalogue sales direct to consumers. Continued strength BKL’s most recent results – for 1Q11 – indicate the group’s ability to continue to grow revenue and profit, as well as capitalise on the company’s leading brand name. Total sales for the quarter were $60.6 million, up 11% from the prior year’s first quarter. Net profit after tax was $7.8 million, a 13% increase on 1Q10. Conclusion BKL is a unique healthcare sector player which offers natural alternatives to traditional medicine, capitalising on society’s trend towards more ‘natural’ health treatments. The group anticipates modest profit growth in FY11, which should be easy to achieve given BKL’s expanded product range and growing footprint in Asia. Receive daily advice on Blackmores and what shares to buy with a 7 day free trial.December 6, 2010
Australian Stocks to Buy Nexus Energy (NXS)
Nexus Energy (NXS) is an emerging oil and gas producer, with operations focused on the Gippsland Basin, offshore Victoria and the Browse Basin, offshore Western Australia. In 2009, NXS transitioned from explorer to producer with the start-up of the Longtom gas project. A lot of interest currently surrounds NXS’s 85% stake in the Crux liquids project (15% Osaka Gas-owned), which is Shell-operated and has a reserve estimate of around 75 million barrels of oil. With liquefied natural gas (LNG) seeing global demand as an alternative fuel source, NXS and its peers are in good standing owing to the LNG boom and recovering commodities market. Nexus saw its share price slump last Friday and this Monday, on heavy volumes. The selling was revealed on Tuesday as coming from a key shareholder that was forced to liquidate its holdings, allaying fears about a breakdown in the company’s fundamental outlook. The Crux of it all NXS is renowned for its involvement in the Crux liquids project, just off the coast of North Western Australia. Over FY10, floating LNG (FLNG) technology in Australia highlighted the potential for FLNG to accelerate a gas and liquids development at Crux. FEED work has been completed and the site has three production-ready suspended wells. Crux is Shell-operated and if it is not developed, Shell will not have any legal title to the licence until the handover date. However, NXS is confident of Crux success and last month confirmed that Shell had granted it an option for a three-year extension of the gas rights handover for Crux to the end of 2023, from 2020. The final investment decision is expected before the end of 2011. First production FY10 was a landmark year for Longtom, with first gas production on 21 October. Cumulative production of 6.2PJ of gas and 78,400 barrels of condensate have been sold to Santos. NXS is aiming to acquire further Longtom production to underwrite a gas/electricity strategy, based on a tightening electricity market post-2014. NXS also conducted a lot of exploration work over the year, including at the Echuca Shoals gas discovery (NXS 100%). Revenue revealed For FY10, NXS clocked a profit after tax of $1.03 million, swinging from a prior-year loss of $50 million. Whilst there were no revenues in FY09, in FY10 NXS reported revenue from ordinary activities of $28.6 million. As expected by the market and in line with the previous year, NXS did not declare a dividend for FY10. Since the FY10 update, NXS has revealed its September quarterly results. Production and sales ceased from the Longtom field on 23 April 2010 following the detection of low levels of mercury in the delivered gas. Therefore, there was no production or sales for the quarter, though NXS and Santos are working on removing the mercury for condensate to be in place later this month. Shareholder selldown Nexus was one of the shares to sell recently, plummeted almost 14% from its 26 November intra-day high before closing the session with a 7% loss, at 46.5 cents. The stock continued to fall on Monday, dropping to a low of 42.5 cents, before closing the session down 6.5% at 43.5 cents. Over the two days the stock fell 13%, on heavy volume. The company announced the source of the selling on Tuesday, revealing that major shareholder Viking Shipping Limited had sold most, if not all of its holdings. According to Nexus, Viking was forced to sell the shares by its financiers. The forced nature of the selling allayed fears about a breakdown in the company’s fundamental outlook. Outlook NXS has finally made the transition from explorer to producer with the start-up of the Longtom gas project, which after a mercury scare is almost back to production. A lot of interest currently surrounds NXS’s 85% stake in the Crux liquids project, which is Shell-operated and has three production-ready suspended wells. If Crux is pursued, NXS stands to benefit from majority participation in a major liquids project. We are not overly concerned about the recent selldown, with forced selling of shareholder or directors’ holdings often leading to artificial price drops that are not sustained. With liquefied natural gas (LNG) seeing global demand as an alternative fuel source, NXS will be one of the stocks to watch in coming months. Daily Australian Stocks to buy and NXS information available with a free report trial.December 3, 2010
Stocks to Buy Campbell Brothers (CPB)
Campbell Brothers (CPB) provides analytical testing services in the key areas of mining and mineral exploration, commodity analysis, environmental monitoring, food analysis and equipment maintenance. The company operates three main businesses: the ALS Laboratory Group, Campbell Chemicals and Reward Distribution, with operations spanning Australia, New Zealand, Asia, North & South America, the Pacific and Africa. Though CPB’s FY10 results included a 30% profit decline (in line with company guidance), CPB yesterday reported record 1H10 results. CPB is benefitting from recovering global economic conditions, in particular an uplift in global mineral exploration activity, which has been reflected in strong revenue growth for its ALS division. Delightfully diversified Though the market has always shown appreciation for CPB’s ALS division – considered the group’s trump card - the company has started to see growth in its other divisions. CPB’s Reward Distribution Group supplies non-food consumables to motels, hospitals, restaurants, fast food chains, five-star hotels, nursing homes, sport clubs and the retail sector. The company’s Chemicals division is one of Australia’s leading importers, manufacturers and distributors of chemicals and associated hygiene products, with its business units comprising Cleantec Chemicals, Panamex Pacific and Deltrex Chemicals. CPB also boasts a minerals division and coal business, adding up to a company with exposure to a wide array of sectors that rely on CPB’s analytical testing services. This broad scope allows CPB to benefit from market cycles: when one sector is underperforming, CPB has others to take profits from. Geared for growth Even in the face of stock market volatility across 2009, CPB continued on with its goal of business expansion and diversification in laboratory testing services. Over FY09, CPB acquired two North American-based businesses: Staveley Services, a leading fluid analysis group, and DataChem Laboratories, an environmental analytical laboratory group. The group also expanded in Asia, acquiring IQG Laboratories, the premier food/ environmental technology laboratory in Thailand, fitting in with CPB’s strategy of entering the food analytical market. In November 2009, ALS expanded its profile in the Australian water services sector with the acquisition of Ecowise Environmental Pty Limited (now part of ALS Environmental). CPB has also recently taken over industrial services company PearlStreet, which has been absorbed into the group’s new ALS Industrial division. A hearty half Yesterday, CPB impressed the market by confirming a record net profit after tax (NPAT) of $66.25 million for 1H10. The result was up 73% on 1H09 and was generated from revenue of $547.53 million, up 37% on year. CPB declared a partly franked (50%) dividend of 65 cents per share, up from 45 cents a year ago. Chairman Geoff McGrath said the record performance was achieved despite the dampening effect of a stronger Australian dollar on foreign earnings translation, and reflects both a recovery in business conditions and CPB’s preparation for that recovery. McGrath noted that the recovery in global mineral exploration activity in particular lifted demand for the analytical testing services provided by the ALS Minerals division. ALS boasted a 56% increase in revenue over the half, with the ALS Environmental and ALS Coal divisions recording very strong revenue growth. The new ALS Industrial division generated revenue in excess of $57 million for the half year. Outlook CPB was one of the hot stocks in 2009, and has continued to advance in 2010 following a string of well-placed and organically pleasing acquisitions. The ALS division – CPB’s trump card – performed very strongly in 1H10, which included a record NPAT of $66.25 million, up 73% on the prior year. As the global economic recovery gains momentum, CPB has seen strong trading in October and November and forecasts underlying earnings for FY11 of $120-$130 million. Receive CPB and stocks to buy advice with a free trial.December 2, 2010
Shares to Buy NRW Holdings (NWH)
NRW Holdings (NWH) provides a diverse range of specialist services to Australia's mining and resources organisations. NWH’s business units are split into four divisions: Civil, Mining, Action Mining Services and Action Drill & Blast. The group’s head office is located in Perth, with branch offices spanning Australia and West Africa. NWH’s clients are sector bigwigs, including BHP Billiton, Rio Tinto and Fortescue Metals. The group’s lucrative contracts over FY10 offset resource sector shakiness, and FY11 is looking to be a stronger year on increased resource sector activity. This bullish resource sector outlook has resulted in NWH becoming one of the hot stocks in recent months. Trumping trials Owing to its ties to the resources sector, NWH suffered over the course of the global economic downturn, in line with its peers. After gaining ground across 2009, the group faced some volatility earlier this year, brought about in the main by uncertainty over the Resources Super Profit Tax (RSPT). This caused a delay to contract awards for NWH, which nonetheless reported a great annual result owing to the group’s inherent strength. Another year of growth In FY10, NWH managed yet another year of growth, managing to maintain its double digit underlying earnings margin despite a difficult economic environment. Despite lingering market challenges, NWH managed to increase revenue in FY10 by 20% on FY09 to $609.7 million. Underlying earnings of $62.3 million represented a 6% increase, whilst Net Profit after Tax (NPAT) was up 2% to $37.9 million. NWH declared a dividend of 6 cents per share, up 200% on FY09. Net debt/equity of 23% was down from 28% in FY09. NWH’s balance sheet is thus in good shape to underpin expansion opportunities and growth. Funding has also been implemented, giving a total facility of some $270 million. Resources return to strength NWH may not be a famous industry name, but its clients are amongst the resource sector’s biggest names. In its civil division, NWH’s RGP5 South project, primarily a rail contract, is in alliance with BHP Billiton Iron Ore. NWH is also carrying out port infrastructure and mine site earthworks for CITIC Pacific Mining at Cape Preston, working on the Christmas Creek Rail project for Fortescue metals, and assisting Rio Tinto with Hope Downs, the Western Turner Syncline project, Simandou and Tom Price Mining. NWH’s long-term alliance with these big names ensures the group is never short of work, even during a resource sector downturn. With the resource sector returning to boom times on a global economic recovery, NWH stands to pick up more lucrative projects with industry leaders in FY11, and will potentially be one of the stocks to watch in coming months. Conclusion NWH stands to benefit from a strong FY11, with the value of the secured revenue for FY11 currently at $620 million (89% of the minimum FY11 target). The group has a balance of order book value of $221 million for FY12 and $180 million post-FY12, and is now focused on benefitting from a resource sector recovery with a wide range of civil, mining and oil and gas clients demanding its services. Receive daily advice on NWH and shares to buy with a 7 day free trial.December 1, 2010
Stocks to Buy Tiger Resources (TGS)
Tiger Resources (TGS) is a minerals exploration company prospective for copper, cobalt, gold, platinum, palladium and uranium. The group’s projects are located in the Democratic Republic of Congo. TGS also has a majority interest in gold exploration in the state of Amazonas in Brazil. The company is in early stages of exploration at most of these projects, though TGS is on schedule for the start of copper production from its Kipoi project in 1Q11. The outlook for copper is positive on a recovering global economy and demand from China. Copper + China = Success Though TGS explores for a number of minerals, its major interest is copper. Last week copper prices weakened amid tensions on the Korea Peninsula and concerns over China’s monetary policy tightening measures. The short, medium and long term outlook for copper demand from Asia is positive. China in particular is showing increased demand for metals, especially copper, of which Australia boasts bountiful resources. Chinese copper demand is slated to continue as the region’s economy continues to grow. China’s economy expanded 9.6% in the third quarter alone. Lucrative project placement TGS’s operations include the Kipoi project in the central part of the Katangan Copperbelt. The project hosts five known copper deposits, Kipoi Central, Kipoi North, Kileba, Judeira and Kaminafitwe. TGS’s 100%-owned Sase project (part of the Lupoto permit) is just 10kms south of the Kipoi Project and the Sase Copper Project can be accessed by a road that leads directly to Kipoi. There is potential for the high grade mineralisation to extend the life of the Stage 1 development at Kipoi Central. Another project, Sakania, which is close to the Zambian border, occupies an area with known gold and copper occurrences. On 25 November, TGS released significant copper results from recent soil sampling programmes. Two extensive geochemical anomalies were identified, and results indicate copper mineralisation is widespread within Lupoto. As such, TGS has outlined new drill targets within Lupoto. The group has the cash to continue drilling, confirming cash on hand at the end of the September quarter of $26.1 million. Conclusion As an explorer, TGS has yet to release any meaningful financial results. However, the company is looking highly prospective owing to its exposure to copper, which is seeing increasing demand from China. Going ahead, TGS is on schedule for the start of copper production from Kipoi in 1Q11, and given the positive outlook for copper, it will be one of the stocks to watch in coming months. Keep informed on Tiger Resources and other Stocks to Buy with a free report trial.November 30, 2010
Stocks to Watch Leighton Holdings (LEI)
Leighton Holdings (LEI) has evolved significantly from the construction company of its origins over 50 years ago, and is now the world’s largest contract miner. LEI owns seven diverse and independent companies: Thiess, Leighton Contractors, John Holland, Habtoor Leighton, Leighton Asia, Leighton International and Leighton Properties. The group operates in more than 20 countries from headquarters in Australia, Hong Kong, Malaysia and Dubai. On 29 November, LEI was given an undertaking by ACS – the potential acquirer of LEI’s parent, Hochtief – that it will enshrine existing governance arrangements between LEI and Hochtief in the event of any takeover. Among these are a promise by ACS not to increase its shareholding in LEI beyond 55% and maintaining LEI’s existing structure. LEI’s involvement in the potential acquisition of its parent makes it one of the stocks to watch in coming months. Keep up to date with Leighton Holdings and all ASX stocks to watch with a free report trial.November 29, 2010
Finance Market News and Investing Analysis November 29 2010
Finance Market News and Investing Analysis 29/11/2010. Receive daily free updates, analysis and recommendations with a free report.
Blue Chip Stocks News Telstra (TLS)
Telstra (TLS) is a provider of telecommunications and information products and services, arguably Australia’s dominant telco company. TLS has also long considered among the market’s blue chip stocks. Its principal activities are the provision of telephone lines; national local, and long distance, and international telephone calls; mobile telecommunications; data; internet and on-line; wholesale; telephone directories; and pay TV. TLS has been one of the shares to sell almost since the T2 float, independent of economic conditions, as customers have been shifting away from spending on landline products. On 26 November, the Australian Senate has passed a bill to split TLS into separate retail and wholesale networks. TLS will be required to give up parts of its existing copper-wire network in order to make way for the rollout of a fibre-optic network. In return, the group will receive $11 billion in compensation. CEO, David Thodey, said the compensation will be used to help fund acquisitions, pay down debt and/or initiate a share-buyback. The bill will now head to the lower house for final approval. Get daily blue chip stock news and TLS advice with a free trial.November 26, 2010
Stock of the Week Straits Resources (SRL)
Straits Resources (SRL) is a coal miner, with secondary interests in copper and gold mining. SRL’s flagship operations include the Sebuku and Jembayan coal mines in Indonesia, which are owned by SRL’s subsidiary Straits Asia Resources. SRL is now looking at a vastly changed future owing to a demerger, and a takeover offer from Thai-based PTT Mining. The development will result in SRL becoming a pure coal play, whilst SRL will demerge its metals businesses under a new ASX-listed company, MetalsCo. SRL says the demerger will provide greater clarity of identity to each of the businesses by creating a pure coal company and a pure metals company. Operational update In this month’s AGM presentation SRL updated the market as to its operational achievements and goals. Straits Asia is targeting 16-18 million tonnes of production from Sebuku and Jembayan by 2013, and Tritton is targeting 25,000t copper production for FY11. SRL’s Brunei drilling has commenced and Madagascar feasibility has reached completion. Mt Muro Gold boasts a stable production platform and SRL anticipates it will be cash flow positive by the end of FY11. The group is also actively exploring, investing around $20 million across the group in FY11. Lessened loss On 31 August, SRL posted an FY10 net loss of $69.4 million, which was less than FY09’s $235.3 million loss. The result was impacted by the $72 million write-down associated with its Hillgrove Mine, whereas on an underlying basis, SRL posted a net loss of $18.5 million. SRL’s focus in 2010 was on the recapitalisation of its Tritton copper mine in NSW and the Mt Muro gold mine in Indonesia, with the group investing $62 million in capex at its core operations during the year. As a result of the capitalisation, SRL was confident enough to announce a 10% share buyback in addition to a 5 cent final dividend. SRL boasts a strong balance sheet with cash and investments of $218 million. SRL said that it was in a strong position to leverage off an upturn in global economic activity, targeting production of 27,000 tonnes of copper at Tritton in FY11. Demerger delight SRL has agreed to a demerger, and a takeover offer from Thai-based PTT Mining. PTT has proposed paying $544.1 million for SRL's existing 40% interest in PTT Asia Pacific Mining Pty, which is also 60%-owned by PTT. The development will result in shareholders receiving $1.72 cash per SRL share, in addition to one share in a new listed company called MetalsCo, which will include SRL’s existing metals and associated businesses. SRL will hold onto its coal business and intends to become a pure coal company. SRL says the demerger will provide greater clarity to each of the businesses by creating a pure coal company and a pure metals company. Moreover, the separation of distinct businesses creates efficiencies and a more appropriate platform for both metals and coal businesses going ahead. Conclusion SRL’s decision to demerge its coal and base metal assets is an important step in unlocking value for shareholders, and SRL’s stock has already risen on the development. The new demerged company will be copper focused, with the Tritton copper mine near Nyngan in NSW targeting 25,000 tonnes in FY11. SRL is positioned in three of the best commodities of the moment - coal, copper and gold. Though SRL performed below expectations in FY10, the recapitalisation programs at Tritton and Mt Muro will be completed towards the end of FY11 and lay the foundations for sustained growth. Given this potential upside, SRL is going to be one of the stocks to watch in coming months. Reveice daily SRL and ASX stock advice with a free trial.November 25, 2010
Hot Stocks Lynas Corporation (LYC)
Lynas Corporation (LYC) is involved in the exploration and development of rare earth minerals, and has been one of the market’s hot stocks in recent months. LYC owns the richest deposit of Rare Earths in the world at Mt Weld (Western Australia), 35km south of Laverton in Western Australia. Yesterday, LYC signed a strategic alliance with Japan-based Sojitz Corporation. The agreement relates to securing additional rare earths for the Japanese market by accelerating the expansion of LYC’s rare earths project. LYC will now seek US$250 million to cover the cost of accelerating the expansion in return for allocating 8,000 – 9,000 tonnes of rare earths per annum to Japan, for the next ten years. LYC jumped over 10% on the news, making it one of the top performers in the Australian share market. Free LYC and Hot Stock Advice with a free trial.November 24, 2010
Australian Blue Chip Shares News Qantas (QAN)
Qantas (QAN) is one of the world’s leading airlines, an Australian icon, and is considered among the market’s blue chip shares. On top of its standard domestic and international flights, QAN also owns budget airline Jetstar, regional airline QantasLink and related travel businesses Qantas Flight Catering. On 23 November, QAN advised that it plans to resume Airbus A380 flights from this Saturday, but only certain routes that don’t require the aircraft using full thrust. The decision to restore flights follows an engine inspection program carried out in the wake of this month’s emergency landing in Singapore. The initial flights will operate on routes between Australia and the UK. QAN shares edged up 0.4%, making it one of the few gainers in the stock market on the day of its update. QAN and blue chip share recommedations available daily with a free report.November 23, 2010
Australian Stock Market News and Finance Analysis November 23rd
Australian Stock Market News and Finance Analysis 23.11.2010 Get free daily analysis.
Shares to Sell Karoon Gas (KAR)
Karoon Gas (KAR) is focused on identifying, exploring and developing acreage that is highly prospective for oil and gas. KAR advised last Friday that it has discontinued plans to list on the Brazilian stock exchange, citing unfavourable market conditions. KAR has been one of the shares to sell since reaching a high of $11 in late October, with the stock having plunged almost 30% since then. KAR based its decision on recent oil and gas company capital raisings not performing to stock market expectations. Karoon Gas also said that it will wait for conditions to improve before assessing other opportunities. Receive daily adivce on KAR and all shares to sell, with a free report trial.November 18, 2010
Stock of the Week, AMP Limited (AMP) AXA Bid
AMP Limited (AMP) is a leading wealth management company with more than 3.4 million customers across Australia and New Zealand. It is Australia’s largest retail and corporate superannuation provider, one of the region's most significant investment managers, and is widely considered among the blue chip stocks. After bouncing back in 2009 after a disastrous 2008, AMP encountered further challenges in 2010 on fears of a global economic slowdown. However, the company is now looking at a stronger future on the likelihood of its latest bid for AXA Asia Pacific Holdings going ahead and on a recovering global and local economy. Overcoming obstacles In August, AMP released its 1H10 results. Net profit for the half rose 17.4% to $425 million on growth initiatives, and ahead of analysts’ forecasts for around $383.4 million. Of concern was AMP’s underlying profit result of $383 million. Though this was up from $367 million in the same half a year ago, it was below market expectations for around $420 million. AMP declared a half dividend of 15 cents per share, which was up on a dividend of 14 cents a year ago. One major upside was cost guidance. AMP expects costs in the Australian Financial Services division to rise just 3% in 2010, down from a prior forecast for 4%-5% higher costs. Holding onto bid hopes AMP’s stock has regained ground over its proposed $13.3 billion takeover of AXA Asia Pacific Holdings, announced yesterday. Under the terms of the proposal, AXA shareholders will receive 0.73 AMP shares for every AXA share owned, $2.55 in cash, as a well as a final dividend of 9.25 cents per AXA share. Importantly, AMP said that it will remain soundly capitalised following the merger, and would maintain its policy of paying out 75% - 85% of its underlying profit in dividends. The deal is also expected to be EPS accretive from FY12 and will assume annual net synergy benefits of $120 million. As a result, the combined AXA/AMP entity will be one of the stocks to watch in coming years. Conclusion Market interest in AMP has returned in spades owing to the group’s latest bid for AXA Asia Pacific Holdings, which looks likely to go ahead. Investors are optimistic over the deal, and if it goes through as planned it is likely AMP will see significant upside. Though AMP recently reported mixed 1H10 results, recovering global markets and strength for the Australian finance sector should also put the group in good stead going forward. Following AMP’s renewed AXA bid, we would like to upgrade our rating on AMP to a Hold (from Sell) in anticipation of upside from the deal. Get daily AMP and ASX stock advice with a free report.November 17, 2010
ANZ Stock News, Korea Exchange Bank Acquisition?
Australia and New Zealand Banking Group (ANZ) is the nation's third-largest bank by market capitalisation, is among the top 50 banks in the world, and is also widely considered among the blue chip stocks. ANZ operates retail and business banking in Australia, New Zealand and throughout the South Pacific. Recent news reports have suggested that ANZ’s attempt at acquiring Korea Exchange Bank has been thwarted by Lone Star Funds. Lone Star, which owns 51% of Korea Exchange, has reportedly sold its stake to another bank, believed to be South Korean-based Hana Financial Group. ANZ denied the rumours, instead stating that it is continuing to participate in the due diligence process. Learn more about ANZ and other financial news with a free report.November 16, 2010
Blue Chip News BHP Billiton (BHP)
BHP Billiton (BHP) the world’s largest diversified resources company, with a global portfolio of high quality assets and more than 100 operations in 25 countries. It is an industry leader in most of the major commodities markets, including aluminium, coking and thermal coal, copper, manganese, iron ore, uranium, nickel, silver and titanium. On top of this, BHP has sizeable interests in oil, gas, natural gas and diamonds. BHP is also the largest company (by market cap) in the Australian share market, and is widely considered among the blue chip stocks. On 15 November, BHP formally withdrew its US$39 billion offer for Potash Corp. The offer’s withdrawal followed Canada’s recent decision to block the bid on grounds it did not provide a net benefit to the country. BHP maintained that its bid would have resulted in a significant net benefit to Canada, with its concessions ranging from foregoing tax benefits in which was entitled to as well committing large sums on exploration and development. However, BHP’s undertakings appeared to be too little too late, with Canadian authorities believed to have been unhappy with the extent of BHP’s concessions. With the bid now cancelled, BHP has promised to return US$4.2 billion to its shareholders through a share buy-back program. In addition, BHP plans to invest US$15 billion in its global business in the coming financial year. Receive daily advice on BHP and all blue chip stocks with a free trial.November 15, 2010
ASX Stocks to Watch Myer Holdings (MYR)
Myer Holdings (MYR) is among Australia’s largest department stores, retailing apparel, fashion, fragrances and cosmetics, homewares, electrical goods and general merchandise. The company floated on the ASX in November last year and became one of the stocks to sell in the months that followed amid a generally bearish outlook for retailers. Although MYR recovered from those lows, rising interest rates have again clouded the sales outlook meaning it will be one of the stocks to watch in coming months. On 12 November, MYR reported a 1.5% drop in 1Q11 sales from a year ago to $706 million. Like-for-like sales were down 1.7% on-year. MYR attributed the fall in sales to price deflation for its flat screen TVs and other entertainment products. However, MYR advised that sales for the remainder of 2011 will benefit from a number of growth initiatives such as new stores, refurbishments, and a total rebuild of the Myer Melbourne store. The group also reaffirmed its previous FY11 guidance of a 5% - 10% growth in net profit to $177 million - $186 million. Recieve daily analysis and recommendations on MYR and other ASX Stocks with a free report trial.November 12, 2010
Australian Stock Exchange News and Analysis November 12 2010
Australian Stock Exchange News and Analysis 12/11/2010 Click for a free report.
Stock of the Week Galaxy Resources (GXY)
Galaxy Resources (GXY) is an S&P/ASX300 emerging mining and chemical company focusing on lithium production. Lithium is used in a range of electronics such as mobile phones, but crucially is a key ingredient in batteries for electric cars - which is set to become a major part of the car market. As a premium supplier of battery grade, GXY is looking into starting up a battery factory and moving into manufacturing as well as mining on forecast demand for lithium in electronic products. Amazing applications Lithium is used in a number of electronic applications. Lithium usage in electronics has grown 25%-30% from 1999-2008, and is currently employed in Porsche starter batteries, energy storage and E-Bikes. China is a major driver of E-Bikes, with production in Asia totalling 44 million bikes per annum. GXY forecasts 2016 sales of US$20 million for E-Bikes, with a large proportion of E-Bikes utilising lithium batteries. An obvious major future driver for lithium battery demand will come via cars. Car lead acid batteries will convert to lithium ion batteries, which have already been employed in the Porsche 911 GT3 model. Innovations such as airbags, electronic windows and electric mirrors in cars all started with high-end cars, and lithium batteries look set to follow the same trend. China is slated to drive growth of electronic vehicles into the future, with 50% ownership of EVs and hybrids predicted by 2030 and 10% of vehicles forecast to be emission-free by 2013. Operations GXY is at an advanced stage of developing its Mt Cattlin Lithium Project (hard rock spodumene) in Ravensthorpe, Western Australia. The project encompasses a mine and minerals plant which will produce 137,000 tpa of 6% Li2O spodumene concentrate. GXY intends to add value to the Mt Cattlin Project by establishing its own downstream lithium processing facilities in China. Recent activities Earlier this month, GXY confirmed it was establishing its Asian footprint and funding growth through listing on the Hong Kong stock exchange (SEHK), opening the group up to a larger pool of institutional and retail investors. The company has also just finalised a capital raising of $91.5 million to meet its funding requirements and for ramp-up of production at Mt Cattlin and the continuing construction of Jiangsu. The group’s most recent major financial results were for the June 2010 half, where the group reported cash and cash equivalents of $18.3 million, up from $3.4 million in the June 2009 half. Its positive result has seen GXY become one of the hot stocks in recent months, surging from around 95 cents in August to be currently trading around $1.60. Conclusion GXY is set to benefit from forecast future demand for lithium in electronic products, particularly in electronic car batteries, with demand from China set to drive the boom. Lithium usage in electronics has already grown 25%-30% from 1999-2008, and is currently employed in Porsche starter batteries, energy storage and E-Bikes. GXY’s focus on lithium puts the company at the forefront of expected lithium demand as a premium supplier of battery grade. Further upside could also come from GXY’s move into manufacturing, and as result, it will be one of the stocks to watch in coming months. Receive daily advice and analysis on GXY and other ASX stocks with an Australian Stock Report free trial.
November 11, 2010
Shares to Sell Programmed Maintenance Services (PRG)
Once simply a painting services company, Programmed Maintenance Services (PRG) has expanded into a full-scale property maintenance group. PRG directly employs more than 11,000 staff and tradespeople across a broad range of government and private sector industries in the resources, infrastructure, education, manufacturing & logistics, commercial/retail and tourism and recreation markets. It has also been one of the shares to sell over the past year, with its stock price tumbling from around $4.60 in October 2009, to close yesterday at $1.38. Highlighting its woes, PRG announced yesterday that it will restructure its property services business to reverse recent under-performance. The group cited reduced demand for its services and lower indexation revenue as the key reasons behind the restructure. PRG advised that restructuring costs are expected to total $15.8 million. The news saw PRG plummet over 20% on the day, putting it among the worst performers in the Australian share market. Learn more with a free trial.November 10, 2010
Australian Stocks News Adeliade Brighton (ABC)
Adelaide Brighton (ABC) manufactures and distributes lime, ready mixed concrete and concrete products and materials to the construction, engineering, infrastructure and resource industry sectors in Australia. ABC is also the market leader in the Western Australian, Northern Territory and South Australian cement and lime markets, and its underlying strength has seen it as one of the shares to buy in recent months.. However, on 9 November, ABC warned it may not renew some of its major cement and lime supply agreements expiring at the end of 2010 and during 2011. The group is cautiously confident of retaining around 50% of a supply contract with Cement Australia, in addition to other major supply agreements. The threat of losing its contracts was a major reason behind an 11.4% plunge in ABC’s share price on the day. This made it one of the worst performers in the Australian stock market. Receive free daily advice on ABC and all ASX stocks with an Australian Stock Report free trial.
Subscribe to:
Posts (Atom)