February 25, 2011
Shares to Buy Automotive Holdings Group (AHE)
Automotive Holdings Group (AHE) is a leading automotive retail and logistics group that can trace its origins back to 1952. AHE operates 106 dealerships over four Australian states and New Zealand. The group is the largest vehicle dealer group in Australia, with high profile passenger and commercial vehicle dealerships primarily operating from leased premises. AHE has been one of the hot stocks since November, surging from around $2.13 to be currently trading around $2.76. Earlier this month, AHE announced a net profit after tax of $29.6 million for 1H11, up 103% on the prior year’s half. Underlying earnings improved 13.8% on year to $65.9 million, while AHE’s automotive division saw a strong 1H11 result, with solid profits on strong consumer demand. Diversified auto ace AHE is Australia's largest automotive retailer, operating its businesses throughout Australia through subsidiaries. The group has its major operations in Western Australia, New South Wales and Queensland. AHE also operates the Prestige Hino truck dealership in Dandenong, Victoria – one of the largest in the country, and a leading Toyota dealership in Melbourne. The company operates its logistics businesses in Australia through subsidiaries Rand Transport (transport and cold storage), AMCAP (motor parts and industrial supplies distribution) and VSE (providing vehicle storage and engineering). Other subsidiaries include Genuine Truck Bodies (which provides body building services to the truck industry) and KTM Sportmotorcycles (motorcycle importation and distribution in Australia and New Zealand). With its expanded network, AHE boasts franchises covering 10 out of the top 11 passenger vehicle brands in Australia by new vehicle sales volume. This diversification provides a level of protection against shifts in consumer preference. Pumping profit On 18 February, AHE announced a net profit after tax of $29.6 million for the six months to 31 December 2010, up 103% on the prior year’s half. This was achieved on group revenue of $1.69 billion, up 5.1%. Statutory net profit after tax (NPAT) for 1H11 was $33.6 million, which included $4.92 million from the profit of carsales.com shares. Underlying earnings improved 13.8% on year to $65.9 million, while the group EBITDA margin was stronger at 3.9%, up from 3.6% previously. Underlying earnings per share (EPS) came in at 13.1 cents, up from 12.7 cents previously, and AHE declared a half dividend of 7 cents per share, flat on year. Automotive Holdings Group noted the result was strong considering increased interest rates, a higher company tax rate and soft results in Queensland. Divisional strength AHE’s automotive division saw a strong 1H11 result, with solid profits recorded in operations in Western Australia, New South Wales and New Zealand. Underlying earnings for the division were up 115.1% on the previous year’s half on strong consumer demand. National vehicle sales increased 4.4% to 1.04 million for the CY10 and industry forecasts a similar result for CY11. AHE’s Logistics division contributed underlying earnings of $16.5 million (an increase of 9.8% on year) whilst the Transport and Cold Storage segment benefitted from increased storage and transport volumes. AMCAP, the automotive parts distribution business, had a solid first half with strong results from the truck parts and automotive refinish areas. Despite a national motorcycle market decrease, KTM Sport motorcycles enjoyed increased volume of 12%, boosted by new model releases in the motocross segment and the continued demand for its Husaberg line of bikes. Outlook AHE remains optimistic about the economic outlook and general trading conditions for 2H11 after reporting a bumper 1H11 result. The company states its automotive division will continue to perform following key management changes to its Queensland operations and continued demand for new vehicle registrations following the flood damage on the eastern seaboard of Australia. The steady performance from AHE’s Logistics division is also expected to continue as AMCAP maintains its strong market position. AHE is pursuing growth opportunities in both Automotive and Logistics and the company’s resilient business model means AHE is well-positioned to deliver solid financial results going forward. You free trial with give you daily advice on what shares to buy and Automotive Holdings Group.February 24, 2011
Financial Stocks News Suncorp Group (SUN)
Suncorp Group (SUN) is Australia's fifth largest listed bank, and one of the largest general insurance groups. The group is a leader in banking, insurance, investment and superannuation and focuses on retail customers and small to medium businesses. On 23 February, SUN reported its 1H11 results, keeping the market content. Net profit after tax (NPAT) of $223 million for the half was down from $364 million in the prior year’s half. SUN attributed the 39% decline to the succession of natural disasters throughout Australia and New Zealand and write-downs following asset sales. SUN declared a half dividend of 15 cents per share, towards the midpoint of its stated 50% - 60% target range. Cash earnings per share (EPS) excluding divestments, the basis of SUN’s dividend payouts, were 27.7 cents. Suncorp Group noted the total amount of reinsurance protection it will receive is approximately $1.5 billion. SUN has incurred a further cost of $173 million to reinstate its reinsurance coverage so it is fully protected against major events for the balance of the year. With the profit loss hardly surprising given the amount of natural disasters occurring over the last year, SUN finished the day up 0.2%, outperforming the share market, which declined 0.2%. Keep updates with Suncorp Group and all Financial Stocks news with your free trial.February 23, 2011
Hot Shares Oil Search (OSH)
Oil Search (ASX:OSH) is an oil and gas exploration and development company that has been operating in Papua New Guinea (PNG) since 1929. The group now explores, develops and produces oil and gas in Papua New Guinea and Australia, not to mention Yemen, Libya, Iraq and Tunisia. OSH was one of the hot shares in 2010, rising from around $5 earlier in the year to a high around $7.10 in December. On 22 February, OSH reported its FY10 results, including net profit after tax (NPAT) including significant items of US$185.6 million, a 39% increase on-year. 2010 total oil and gas production was 7.7 mmboe, 6% lower than in 2009 but above market guidance. Lower production reflected natural decline from the mature PNG oil fields, offset by production from recent successful development drilling, the optimisation of existing wells and facilities and a significant reduction in unplanned plant and well downtime. Driving the profit result was a 23% rise in the average realised oil price and a one-off restatement of deferred tax, which more than offset 7% lower oil sales volumes. Excluding significant items, NPAT rose 45% to US$144.1 million, whilst OSH declared a total dividend for the year of four US cents per share, flat on 2009. OSH also confirmed that the famed PNG LNG project is looking at first gas in 1H14. Get daily hot shares and Oil Search shares recommendations with your free trial.February 22, 2011
West Australian Newspapers (WAN) Acquires Seven Media Group
West Australian Newspapers (WAN) is the leading media group in Western Australia. The flagship of the company is The West Australian daily newspaper, which is published Monday to Saturday. On 21 February WAN agreed to acquire Seven Media Group for $4.1 billion. The deal will create the biggest media group in Australia, to be known as Seven West Media, and will be listed on the Australian share market. To help finance the deal, WAN will conduct a $1.15 billion capital raising. WAN placed its shares in a trading halt prior the announcement, so it will be one of the stocks to watch once the halt is lifted. Under the new ownership structure, Seven Group Holdings (SVW) would own 29.6% of the company shares, and private equity group, Kravis Kohlberg and Roberts, would hold 12.6%. WAN also announced its first half results, which showed a 1.3% rise in 1H11 in net profit to $50.1 million. The group declared an interim dividend of 19 cents per share. Revenue grew 2.1% to $209.4 million, reflecting a 3.8% increase in consolidated advertising revenue. For daily West Australian Newspapers and ASX acquisitions news, get your free trial now!February 18, 2011
Australian Stock Report Announces 'Learn to Trade @ Home' Multimedia Program
Australian Stock Report is proud to launch the Learn to Trade @ Home education multimedia program. The Education Multimedia program has been designed with both the beginner and experienced trader and investor in mind. Learn to Trade @ Home allows you to access education material, review workshop notes and watch live video examples. When the time is right we'll even help you open your trading account and help you place your first trade, just to make sure that you are comfortable with what you have learnt. View the content as many times as you like in your home, office or on the road. Interact with all the online education support tools and access our support forum and "Ask the Presenters" to ensure that any of your questions are answered. View the video below and register your interest. Learn to Trade @ Home covers 8 Modules, incorporating the following topics:
Shares to Buy Liquefied Natural Gas (LNG)
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). Get LNG and shares to buy advice daily, with your free trial.February 17, 2011
Blue Chip Shares News BHP Billiton (BHP)
BHP Billiton (ASX:BHP) is the world’s largest diversified resources company, with a global portfolio of high quality assets and more than 100 operations in 25 countries. BHP is the largest company (by market cap) in the Australian share market and is widely considered among the blue chip stocks. 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. On 16 February, BHP reported a 72% surge in 1H11 net profit to US$10.5 billion, beating some analyst estimates. Underlying EBITDA surged 60% on-year as an improving economy and supply side constraints saw BHP benefit from major increases in the prices of its core commodities. Core earnings at BHP’s iron ore division grew 178% on-year amid record production in WA, rising prices and persistent tightness in iron ore markets. BHP reported strong results in its other major commodities, with coal and base metals both seeing a big increase in underlying EBIT. BHP was also reported a 123% surge in net operating cash flows. As a result, BHP boosted its existing share buyback plan to US$10 billion, which will be completed by the end of 2011. The group declared an interim dividend of US46 cents a share, up from US42 cents a year ago. BHP was bullish about its outlook, noting that growth in emerging markets was expected to remain strong despite further monetary tightening in countries such as China and India. Access daily blue chip shares news and BHP shares advice with a free trail.February 16, 2011
AXA Asia Pacific (AXA) Dividend Stock News
AXA Asia Pacific (AXA) is a diversified financial services company that has been operating in Australia for over 100 years. The company’s main products are spread across investments, insurance, retirement and superannuation. AXA was one of the hot stocks late last year after agreeing to AMP’s takeover offer for the group. On 15 February AXA announced a 1H11 net profit of $602 million, down 11% from a year earlier. Investment earnings were unchanged at $185.1 million, with the positive impact of falling US bond yields offsetting negative equity market returns. In Australia, earnings were up 8% to $190 million, mainly due to higher fee revenue. However, earnings at Hong Kong were down 11% to $297 million. AXA declared an interim dividend of 9.25 cents (unfranked), which was unchanged from a year ago, whilst its share price fell 0.2%. Keep up to date with AXA and all dividend stock news with your free trial.February 15, 2011
Shares to Sell Leighton Holdings (LEI)
Leighton Holdings (LEI) activities focus on contract management, project management, and property development in Australia, Hong Kong and South East Asia. LEI has been one of the shares to sell since announcing a profit warning last November. On 14 February, LEI reported a fall in 1H11 net profit to $216.7 million, down 25% from 1H10’s $288.9 million. Excluding the sale of its 35% stake in Indian-based Welspun Corp, LEI would have reported a profit of just $14.7 million. Leighton Holdings attributed the weak result to wet weather in Queensland impacting some of its mining projects, a stronger Aussie dollar, and a write-down of its 45%-owned Habtoor Leighton Group in Dubai. The group declared an interim dividend of 60 cents a share, down from 85 cents a year earlier. The result, which missed analyst estimates, resulted in LEI downgrading its full year guidance by 5.8% to $480 million. For daily Leighton Holdings and shares to sell updates, try a free trial.February 14, 2011
Financial Shares News Sunland Group (SDG)
Sunland Group (SDG) is a property developer listed on the Australian share market. The company was established in 1983 and has benefited from its exposure to the burgeoning Gold Coast property market since the 1980s. SDG focuses primarily on the construction and management of residential high rises, luxury hotels, commercial property and, to a lesser extent, childcare facilities. Last week, SDG announced a 7.2% fall in 1H11 net profit to $7.8 million, weighed down by a 5.6% decline in revenue from a year earlier. SDG’s Australian portfolio saw solid housing sales across the half, although settlements were impacted by wet weather. The Dubai portfolio continued to face a challenging market conditions despite an increase in sales throughout November and December. Sunland Group stuck to its full year guidance of $20 million, although this was subject to weather conditions not impacting the timing of its settlements. SDG didn’t declare an interim dividend, while its share price jumped 2.6% on the day. Daily advice on Financial Shares including Sunland Group available in your free trial.February 11, 2011
Buy Stocks Resource Generation (RES)
Resource Generation (RES) is invested in coal and energy resource projects in the Waterberg coalfields (South Africa) Tasmania and Cameroon. RES’s primary focus is on the South African Waterberg project, which consists of 12 coal tenements. These are held via two joint ventures.
The group’s portfolio of resources already accumulated includes low overburden, inexpensive-to-mine coal deposits in South Africa and Australia, as well as potentially very low-cost uranium deposits in Cameroon.
RES has been one of the hot stocks recently, surging around 50% since mid-December 2010.
With cash on hand of $37 million, RES is well placed to take advantage of forecast demand for coal, particularly via its Waterberg project.
South African story
RES is on track for the development of a massive coal mine in South Africa, having recently lodged the mining rights application for the Boikarabelo mine in the Waterberg region.
RES is looking at the June quarter for approval of the application. The mine construction is slated to be completed in 2012, which will mark the year of the delivery mine fleet.
Waterberg constitutes 40% of South Africa’s remaining coal source. The Boikarabelo mine is a major 6.4 billion tonne resource, with current probable reserves of 745 million tonnes.
Infrastructure and transport solutions were completed in 2010.
Coal power
Over the next 18 months, continued demand from emerging economies such as China and India is expected to drive growth in consumption of energy and minerals commodities.
Treasury official David Gruen noted that strong demand for Australia’s coal and iron ore from Asian heavyweights is expected to continue for at least the next 15 years.
Even though China and India have been growing rapidly for the past few decades, they remain at the early stages of economic development.
As such, it looks likely that Australia’s terms of trade will be significantly higher on average over the next couple of decades than before the current mining boom.
Resource Generation, with its dominant exposure to South African coal, is poised to meet coal supply shortages as global demand increases.
In the interim…
For RES’s December 2010 half, the group recorded a loss of $3.5 million.
Resource Generation attributed the result to the loss of interest income, share-based compensation costs, Tasmanian resource assessment expenses, listing fees (on the Johannesburg Stock Exchange) and net operating expenses.
In addition to listing on the JSE over the half (providing South African investors with easier access to participate in the project), in September RES secured its first coal off-take contract with Indian-based Integrated Coal Mining.
The deal involves RES selling coal for 20 years from Boikarabelo. December also saw RES signing a second coal off-take contract with Bhushan Steel to purchase coal for 20 years.
In November, RES issued an equity placement to raise $30 million in cash to use for rail link acquisitions. This was completed in December 2010 via a share purchase plan.
Outlook
Though it is still in the development stages, RES’s Waterberg operation is looking highly prospective for coal production so it will be one of the stocks to watch in the coming months.
Resource and reserve upgrades for Waterberg were announced in October and December. Boikarabelo’s gross in-site resource base is 6.4 billion tonnes and 1.5 billion tonnes of inferred resource.
With probable reserves of 745 million tonnes, Boikarabelo (and RES’s other prospective projects) will see RES producing coal over the coming years to help meet the strong demand from Asian countries.
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February 10, 2011
Hot Shares Boral Ltd (BLD)
Boral Ltd (BLD) provides building and construction materials in Australia, where it is the country’s largest supplier, as well as across the US and Asia. BLD has been one of the hot shares since December, rising from around $4.50 to be currently trading around $5.10. On 9 February, BLD reported a 28% growth in 1H11 net profit to $94 million, driven by a 4% increase in revenue to $2.4 billion. Core earnings at BLD’s building products division was up 22%, with improvements in operational efficiency and strong market demand offset by the impact of wet weather. The cement division saw a similar rise in earnings, with a 7% decline in volumes compensated by improved pricing. Boral said the rebuild of Queensland may have a favourable impact on 2H11 earnings, with the full year result expected to be between $160 million and $175 million. BLD declared an interim dividend of 7.5 cents, up from 7 cents a year earlier. BLD shares soared 8.9% on the day of the announcement, making it one of the best performers in the Australian share market. Receive Boral news and Hot Shares recommendations with your free trial.February 9, 2011
Financial Stocks News National Australia Bank (NAB)
National Australia Bank (ASX:NAB) is one of Australia’s big four banks, whose divisions span retail and business banking, wealth management, capital markets and institutional banking. NAB’s businesses span across the globe, with operations in the US (Great Western Bank), the UK (Clydesdale and Yorkshire Bank), and New Zealand (BNZ). The company is also widely considered among the market’s blue chip stocks. On 8 February, NAB reported unaudited 1Q11 cash earnings of approximately $1.3 billion, up 18% from the previous year. NAB attributed the result to improved revenue from its Australian banking operations, mark-to-market gains on its specialised group assets portfolio, and lower charges for its bad and doubtful debts. However, the group said margins were down from the 2H10 due to higher funding costs offsetting the recent repricing of its retail loan book. NAB stocks added 1.9% after its earnings result exceeded analyst estimates, making it the best performing major bank in the stock market on the day. Get daily NAB and Financial stocks news and advice with a free trial.February 8, 2011
Australian Shares News 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 2009 and became one of the shares to sell in the months that followed amid a generally bearish outlook for retailers. The group was hit hard on Monday after warning that its FY11 net profit was expected to be down 5% from FY10’s result. Last November, MYR said that FY11 earnings were expected to grow 5% - 10% on-year. MYR attributed the downgrade to a fragile consumer environment as a result of increased costs of living, the anticipated flood levy and food inflation. MYR also offered a sombre assessment of first half sales, which it said were impacted by significant price deflation in a number of key product lines. MYR tumbled 11.5% following its update, making it one of the worst performers in the Australian share market on the day. Get Myer Holdings and Australian Shares news and advice with a free trial.February 7, 2011
QBE Insurance (QBE) Acquires Balboa
QBE Insurance (ASX:QBE) is a leading provider of general insurance and reinsurance services in Australia, the Pacific, Asia, the Americas and Europe. QBE is also widely considered among the market’s blue chip stocks. On Friday, QBE announced that it had acquired the Balboa insurance business from Bank of America-Merrill Lynch for US$700 million. The annualised net earned premium from the agreement is expected to be around US$1.3 billion, and the purchase will be funded through new short-term bank facilities. The group also confirmed 1H11 net profit will be approximately US$1.28 billion, in line with analyst estimates. However, due to the catastrophic claims and low interest yields in the US, UK and Europe, its insurance margin was expected to be at the bottom end of its previous 16% - 18% guidance. QBE flew 7.4% following its update, making it one of the strongest performers in the share market. All acquisition and QBE Insurance news available with your free trial.February 4, 2011
Shares to Buy Northern Iron (NFE)
Northern Iron (NFE) is an Australian iron ore company which was formed to acquire the Sydvaranger Iron Project in northern Norway. NFE has redeveloped Sydvaranger to commence production of magnetite iron concentrate for supply into the European market. This strategy aims to provide investors in NFE with direct exposure to iron ore prices within the next two years. Iron ore prices are skyrocketing of late, and it is believed that spot prices may surge through US$200 per tonne, returning to pre-GFC record levels. Established operations The Sydvaranger Iron Project (Norway) operated from 1910 to 1997, then was reopened in October 2009 with first shipment in November 2009. Sydvaranger encompasses three magnetite deposits with JORC compliant resources and a further 20 prospects with known iron mineralisation, several of which have been mined previously. NFE’s development plan for Sydvaranger is based on utilising the existing infrastructure on site in order to commence production of a magnetite concentrate product as quickly as possible for the lowest capital cost. Current plans for the re-furbished mine are for the mining of 7 million tonnes per annum (Mtpa) of ore to produce approximately 2.9Mtpa of concentrate over a 19 year mine life. Recent results For the recent December quarter (4Q10), NFE noted a strong improvement in concentrate quality to meet target specifications owing to full commissioning of concentrate screens in mid-November. Northern Iron clocked a significant improvement in milling performance for the quarter to a record 969kt, up 26% on the previous quarter. The quarter also included an increase in concentrate production by 8% on the previous quarter to 375kt. Due to improved maintenance performance, NFE expects to achieve its FY11 production target of 2,300kt – despite recently reduced concentrate volume as a result of optimisation work on the filtering system to achieve quality specifications. Recovery in December and January has been as expected and thus NFE stands by its FY11 production target. NFE noted a 20-30% average sales price increase over the December quarter is expected to be achieved in 1Q11 due to the improved product quality and strength of the iron ore market. Iron ore Today it was confirmed that a key iron ore price index (Platts’ 62% iron ore index) edged up to a record US$187.25 a tonne. The index is used in conjunction with others, based on spot transactions in China by global miners including BHP Billiton and Rio Tinto. Over the next 18 months, continued demand from emerging economies such as China and India is expected to drive growth in consumption of energy and minerals commodities. NFE’s exposure to iron ore is lucrative. Restocking by Chinese steelmakers and tight supplies have driven a surge in spot prices to near US$200 per tonne, boosting price indexes by 10% so far this year. If iron ore does reach US$200 per tonne, it would bring prices up to the all-time record levels of March 2008, during the commodities boom that occurred before the global economic downturn hit iron and steel markets. Outlook NFE is an emerging iron ore miner, explorer and producer, whose flagship Sydvaranger Iron Project will help contribute towards the company’s FY11 production target of 2,300kt. Iron ore prices are skyrocketing of late, and it is believed that spot prices may surge through US$200 per tonne, returning to pre-GFC record levels. NFE noted a 20-30% average sales price increase over the December quarter is expected to be achieved in 1Q11 due to the improved product quality and strength of the iron ore market. Northern Iron has been one of the hot stocks in recent months due to the brightening outlook for iron ore. Its stock has surged from around $1.50 in late November to just under $2.00, making it one of top performing small caps in the Australian share market recently. Receive daily Northern Iron and all shares to buy updates, with your free trial.February 3, 2011
Mining Buy Stocks Minara Resources (MRE)
Minara Resources (MRE) is a leading Australian resources company, one of our country’s top three nickel producers and one of the top ten in the world. Based in Perth, MRE operates the Murrin Murrin nickel cobalt JV project (60% Minara, 40% Glencore International AG) which is situated in the northern goldfields region between the towns of Leonora and Laverton. MRE had a tough time over the course of the global economic downturn, as did all global equities, though unlike many others the miner failed to come into 2010 on a strong note. However, MRE has entered 2011 in a more robust position, being one of the hot stocks throughout December. Soaring nickel prices has benefitted the miner, which recently reported rising profit and revenue for 1H10 and a respectable December quarter result. About face MRE showed signs of turning around its stock slump of recent years last August, when it reported its 1H10 results. The group swung to a 1H10 net profit of $39.8 million, compared to a $3.1 million loss a year earlier. Revenue jumped 23%, even as nickel production at MRE’s Murrin Murrin operations fell due to a pipeline failure on 25 May. The company’s balance sheet was also in healthy shape, with no debt, and $363 million cash on hand at June 30. MRE did not declare an interim dividend, and maintained its full year production guidance at the lower end of 30,000 – 34,000 tonnes of nickel. Nickel finds its niche Nickel is no longer considered to be one of the lagging base metals, with the metal outperforming its peers over recent months. Whilst last week saw declines for base metal prices across the board, nickel managed a gain for the week (+1.1%) on rising demand and firming overseas trends. Going ahead, nickel prices are expected to continue gaining traction. Broader strength for base metals overseas, better-than-expected US economic data and strong demand from alloy makers are all factors supporting the upside in nickel futures. A stronger nickel market and improving operations led MRE to upgrade its Murrin Murrin 2011 output to 33,000-37,000 tonnes (on 9 December). Production update On 14 January, MRE released its results for the quarter ending 31 December 2010. For the quarter, total production of 6,508 tonnes of packaged nickel and 448 tonnes of packaged cobalt was achieved at Murrin Murrin. As anticipated, metal production was impacted by a three-week, planned triennial statutory shutdown. The plant recommenced production without incident over the quarter. Minara Resources cash on hand at 31 December 2010 was $225 million (up from the September quarter result of $220 million). The miner is set to release its quarterly activities report on 31 January. Outlook In its recent quarterly results, MRE re-confirmed its upped December guidance for Murrin Murrin 2011 output of 33,000-37,000 tonnes as nickel prices gain traction. Though the quarter featured a planned plant shutdown, MRE has confirmed the plant has recommenced production and the company identified no foreseeable maintenance issues for the future. Though the stock has struggled over the last few years, the major turnaround for nickel price puts Minara Resources in good stead going into 2011, making it one of the stocks to watch in coming months. Receive daily Minara Resources and mining buy stocks with a free report trial.February 2, 2011
Stocks to Buy White Canyon Uranium (WCU)
White Canyon Uranium (WCU) is a Perth-based company focused on the exploration, recovery and production of uranium. The company operates in North America as White Canyon Uranium, North America and holds multiple mining claims in the uranium rich area of Southern Utah. WCU has been in production since 2009, one of only a few companies in the United States who have moved beyond exploration and permitting and into actual production. The company has just announced the results of the first milling of ore from its Daneros mine, which was in line with expectations. WCU stands to benefit from recent strength in uranium prices, which have gained 12% this year so far alone. A milestone year The past year has been a busy one for WCU, with the group scoring many significant achievements. Final approvals for WCU’s mine permit for the development of the Daneros Mine came in May, 2009; development of the twin decline mine commenced in June 2009 and the ore was reached in December 2009. First ore was delivered to the White Mesa Mill at the end of 2009. In January last year the company entered a three year ore treatment agreement with Denison Mines Corp. Mining has continued on budget and ahead of schedule: by the end of last June, around 20,000 dry tonnes of ore had been stockpiled at Denison’s White Mesa Uranium Mill in preparation for milling of up to 45,000 tonnes in 2010. WCU has continued the process of securing future expansion through the acquisition of additional tenements within the group’s project areas. New acquisitions include the Radium King, Spook and Maybe in the Red Canyon area and the Hide Out in the Deer Flat area. On 24 January, WCU announced the results of the first milling of ore from the Daneros mine: a total of 35,635 tonnes of ore was milled over the period November 1, 2010 through December 10, 2010. The grade was in line with WCU’s expectations and the expense to recover the uranium was less than budgeted. Production is continuing at the Daneros Mine and WCU have already stockpiled 9,000 tonnes of ore for the next mill run in 2011. Upbeat on uranium Uranium, whilst controversial, is a lucrative source of energy in a time when fears have grown about the finite resources of oil, the current weapon of choice for energy. The outlook for nuclear power worldwide therefore remains extremely positive. Uranium price has soared over the last few months, flying from around US$42 in June last year to present prices flirting around US$70. Uranium prices are breaking out and are already up 12% for the year so far. Increasing demand and tight supplies are pushing price higher, which is a boon for White Canyon Uranium and its uranium-focused peers. By 2014, annual global demand of uranium is projected to approach 96 million kilograms. This is expected to leave a 36 million kilogram deficit, which is likely to result in higher prices both for the metal and for those companies bringing uranium to the market. Outlook WCU has been one of the hot stocks in recent weeks, surging from around 16 cents to 20 cents. The group is well-placed owing to strength for uranium price, which is forecast for continued growth into the future. The group this year will receive proceeds from its first processed ore. Production is continuing at the Daneros Mine and WCU have already stockpiled 9,000 tonnes of ore for the next mill run in 2011. Going forward, WCU will continue to seek expansion opportunities via acquisitions whilst simultaneously increasing its resource estimates as drilling and exploration continues. Get White Canyon Uranium and Stocks to Buy updates with a free trial.February 1, 2011
Hot Stocks News Austereo (AEO)
Austereo (AEO) is a leading commercial radio broadcaster in Australia. The group operates three key national radio networks; Today, Triple M and two joint venture stations in Canberra and Newcastle. On 31 January, AEO has accepted a $741.3 million takeover from Southern Cross Media (SXL). The offer comprises $2.00 cash per AEO share, plus a 5 cent dividend declared by AEO. If the offer reaches the 90% compulsory acquisition threshold, the offer’s combined value amounts to $2.15 per share. SXL advised it will launch a capital raising to help fund the deal. AEO skyrocketed 10.6% on the day of the offer, making it one of hot stocks in the day’s market action. Keep informed of Austereo, hot stock news and recommendations with a free trial.
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