Sundance Resources (SDL) is an Australian-based international iron ore company developing the Mbalam Project in the Republic of Cameroon in the central west coast of Africa. SDL is advancing a significant exploration program and feasibility studies on the project based on production of 35 million tonnes per year hematite. It was also one of the hot stocks in the final months of 2010, surging from around 15 cents in September to a high around 60 cents by December. Recently, the group had to deny newspaper reports that its majority shareholder Hanlong Mining is looking to make a full takeover offer. SDL said on 16 May that it may sell up to 50% of its interest in the Mbalam Iron Project to a strategic partner. The group is confident of successfully introducing a strategic partner to the project by the end of June 2011. SDL shares rocketed 11% on the day of the takeover speculation, making it one of the best performers in the Australian share market. Click for Daily Shares Recommendations.May 31, 2011
Best Performing Shares News Sundance Resources (SDL)
Sundance Resources (SDL) is an Australian-based international iron ore company developing the Mbalam Project in the Republic of Cameroon in the central west coast of Africa. SDL is advancing a significant exploration program and feasibility studies on the project based on production of 35 million tonnes per year hematite. It was also one of the hot stocks in the final months of 2010, surging from around 15 cents in September to a high around 60 cents by December. Recently, the group had to deny newspaper reports that its majority shareholder Hanlong Mining is looking to make a full takeover offer. SDL said on 16 May that it may sell up to 50% of its interest in the Mbalam Iron Project to a strategic partner. The group is confident of successfully introducing a strategic partner to the project by the end of June 2011. SDL shares rocketed 11% on the day of the takeover speculation, making it one of the best performers in the Australian share market. Click for Daily Shares Recommendations.
May 30, 2011
Shares to Sell AJ Lucas Group (AJL)
AJ Lucas Group (AJL) is a leading provider of both specialist infrastructure and energy services. The group is the leading supplier of drilling services to Australia’s coal and coal seam gas (CSG) industries. It is also Australia’s largest builder of long-distance gas pipelines. On 30 May, AJL downgraded its full year guidance and flagged asset sales in an attempt to get its debt under control. AJL said that due to a combination of legal expenses, restructuring costs, and difficult trading conditions, it now expects an FY11 underlying EBITDA of $19 million - $21 million. Indeed, AJL has been one of the shares to sell over the past 6 months due to these problems. The latest guidance compares to AJL’s previous forecast of an EBITDA of $32 million - $36 million. AJL suspended its shares from trading as it assesses various capital restructuring proposals. Click for FREE Shares Advice.May 24, 2011
Sell Shares Elders (ELD)
Elders (ELD) is one of Australia’s most historic companies, having been an advisor, supplier and agent for Australian primary producers for 170 years. ELD incorporates the Elders rural services and financial services businesses and the forestry and automotive operations acquired and developed by Futuris Corporation. The group was one of the shares to sell following the GFC, plummeted from a high near $30 to current levels around 50 cents. On 23 May, ELD reported a 1H11 net loss of $14.6 million. This compares to a $165.9 million loss a year earlier. The result was affected mostly by debt restructuring costs, with the group actually reporting an underlying profit of $1 million. Underlying EBIT rose 94% on-year, with the Rural Services division contributing most to the result due to an improvement in network performance. However, Elders downgraded its full year profit forecast to $7.5 million - $24.5 million amid uncertainty about the outlook for its Automotive and Forestry divisions. ELD tumbled over 9% on the day, making it one of the worst performers in the Australian share market. FREE Daily Sell Shares adviceMay 23, 2011
Buy Shares Ramelius Resources (RMS)
Ramelius Resources (RMS) is a Western Australian-focused unhedged gold producer with mining operations at Wattle Dam near Kambalda and milling facilities at Burbanks near Coolgardie. Wattle Dam is the group’s cash cow, producing solid amounts of high grade gold at a low cost. With Wattle’s mine life potentially coming to an end, RMS also has its lucrative Mt Magnet project, which will come into production this year. RMS is benefitting from its strong operations and boom times for gold, making it one of the hot stocks over the past year. The group is a low-cost operator with no debt and in a strong financial position with $90 million in cash on hand. Golden Wattle The company's primary project is the Wattle Dam gold mine, which has produced in excess of 150,000 ounces of gold since 2006. It is the highest grade gold mine in Australia and has a low cost of production of less than $500 per ounce of gold. It is currently being mined as an underground operation. However, the mine’s life span is coming to an end, so RMS is drilling to extend the mine life. In a recent update, Ramelius Resources noted it has extended its mine life to 2013. Fortunately, recent drilling confirms mine life upside, with a new high grade zone discovered at depth (as at February 2011). Wattle boasted production of 91,700 oz in 2010 at a total cash cost of $458 per ounce. It clocked record production of 26,668 oz in the recent December quarter and mine cash flow of $25.6 million. Wattle anticipates production of 90,000 oz in 2010/11. Buy Shares Advice Magnetic money-maker Last July, RMS purchased the Mt Magnet gold project, located 600km north east of Perth. The group intends to bring this project into production in 2011, which will handily replace Wattle Dam if the mine’s life is not extended. Mt Magnet looks to be a lucrative cash cow for RMS. A recent drilling program has identified a number of high grade gold targets for follow-up in 2011. The project boasts historic production of 5.6M oz of gold, JORC resources of 3.3M oz and reserves of 474,000 oz. Mt Magnet boasts potential production of 100,000 oz per annum (p.a.) for 5-7 years and a further 200K oz of gold is available in other pits. RMS has more than enough cash in the bank to push ahead with Mt Magnet owing to its Wattle Dam production sales. RMS is targeting an all-up cost of $800 per ounce. There is also potential to lift production to 150K oz p.a. by adding underground ore. The mine currently has an operating margin of around $1000 per ounce. Strong financials and sector For the half ending December 2010, RMS recorded a net profit of $32 million and announced capital return and a dividend totalling 7 cents per share. RMS is in a strong financial position with $86 million in cash and gold on hand with no debt. The group has a market capitalisation of $294 million and clocked a net profit of $20 million for FY10. For the year, total cash costs of $458 per ounce were produced and the group saw production of 91,700oz of gold in 2010. Gold has generally hovered around US$1,360 an ounce lately, with the precious metal seeing a bull market over the last decade, and repeatedly hitting historical new highs. Gold prices rose at an average of 18% a year over the last decade and companies such as RMS are benefitting from the boom. Indeed, the likely continuation of the boom means RMS is currently one of the stocks to watch. Outlook The Wattle Dam mine is the highest grade gold mine in Australia, is low-cost and has produced a lot of gold and cash for RMS, which is a debt-free company. If Wattle Dam’s mine life is not extended, RMS has its Mt Magnet prospect on hand for production this year. RMS is targeting gold production of 230,000 oz by 2013/14. Click for Daily Buy Shares Advice.May 20, 2011
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. Recently released first half results have already reflected inherent strength with profit jumping over 30%. Resources return to strength NWH may not be a famous industry name, but its clients are amongst the resource sector’s most blue chip stocks. In its civil division, NWH’s RGP5 South project, primarily a rail contract, is in alliance with BHP Billiton Iron Ore. NRW Holdings 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, making it one of the stocks to watch. FREE Trading Advice First half results Last month, confirmed that it is on track to achieve an FY11 revenue target of at least $700 million. However, adverse weather has impacted productivity at a number of NWH’s sites. As a result, NWH expects FY11 net profit to be at the lower end of consensus estimates between $40 million and $45 million. In addition, NWH has announced a $70 million capital raising. The issue price of $2.74 is an approximately 4% discount to NWH’s closing price on 13 April. NWH said it would use the proceeds to moderate its gearing levels following the acquisition of plant and equipment from Comiskey Earthmoving. For the first half, NWH confirmed 1H11 revenue of $358.3 million, up 30% on a year ago. Net profit grew 31% to $20.4 million whilst the group declared a half dividend of 4 cents per share, up from 3 cents last year. NWH said the result was driven by an improved performance in the civil, mining and the drill and blast divisions. The group’s balance sheet is in a strong position with a cash balance of $40.9 million and net debt of $14.9 million at 31 December 2010. The company says it is well placed to achieve its minimum revenue target of $700 million, representing 15% growth on FY10. However NWH’s previous guidance outlined expectations of a 15% – 20% growth in revenue for the full year. Looking ahead NWH has a significantly improved cash position in 1H11. Combined with its improved gearing position, NWH has plenty of capacity for future growth. NWH’s balance sheet is thus in good shape to underpin expansion opportunities and growth. The value of secured revenue for FY11 is currently $643 million which is 92% of its minimum FY11 target of $700 million. NWH will be looking to diversify its revenue base as it aims to create a $1+ billion plus order book. The group has a balance of order book value of $226 million for FY12 and $194 million post-FY12, and is now focused on benefitting on a resource sector recovery with a wide range of civil, mining and oil and gas clients demanding NWH’s services. Click for FREE Trading Recommendations.May 19, 2011
Stocks to Watch McMillan Shakespeare (MMS)
McMillan Shakespeare (MMS) is the leading provider of independent salary packaging services in Australia. The group’s primary services include: salary packaging, remuneration policy design, motor vehicle lease management, information retrieval, procurement of motor vehicles and finance and administration of fuel card and service maintenance programs. MMS occupies a unique market position: it is the only integrated provider of salary packaging and “company car” solutions, and its services are seeing a lot of demand. Recent acquisitions have helped MMS win new lucrative business contracts, and it has been one of the market’s hot stocks throughout the past 12 months. The benefits are reflected in its strong business momentum which saw MMS report solid first half earnings. The salary packaging scene Salary packaging is a lucrative business. Australia’s taxation system allows tax concessions for certain employee benefits and for certain industry sectors, which makes salary packaging attractive. Eligible employees increase their disposable income by using pre-tax salary to pay for goods or services. They also use these benefits to attract and retain staff in a tight employment market. Existing payroll systems do not cope well with salary packaging, and this is where MMS comes in. McMillan Shakespeare administers budgets; deducts pretax salary; makes payments to service providers on behalf of an employee; and accurately reports transactions for tax purposes. A high transaction load, a complex business process and the tax implications leads many employers to outsource this task to MMS. Likewise, fleet management is a complex and capital intensive task. Many corporations choose to outsource management and/or lease their fleet using MMS. First Half results MMS saw its NPAT and EPS for the first half rise 83% on year. NPAT for the period came in at $20.5 million and EPS at 30.3 cents per share. An interim dividend of 16 cents per share was declared, up from 10 cents a share on year. Its Asset Management business recorded a NPAT of $6.6 million. First half performance in its asset management segment exceeded expectations. Asset Management capability has opened up significant new opportunities in the private sector for Group Remuneration Services. This has been a largely untapped market for MMS. The company has been focusing on integration; maintaining momentum in its core business; and disciplined prioritisation of tasks and opportunities. New business wins and cross sells continue to build momentum. Looking ahead MMS runs a unique business that is able to grow even during economic downturns, with the market running at 3-8% per annum. A combination of the Group Remuneration Services business with the Asset Management business is helping to create a different and more capable organisation. The company has been able to capitalise on demand for salary packaging and fleet management services, which involve a complex business process as well as tax implications, leading many employers to outsource this task to MMS. Continued, disciplined development of its core business combined with increasing participation rates within its existing customer portfolio will help MMS going forward. The company’s FY11 earnings are likely to exceed expectations given the typical seasonal bias favouring the second half of the year. MMS has been in a strong uptrend since early 2009 and it will be one of the stocks to watch given its alliance with big-name (including government) clients and new contracts. Click Now for FREE Daily Stock Recommendations.May 18, 2011
Hot Shares News James Hardie (JHX)
James Hardie (JHX) is a leading international building materials group that produces a wide range of fibre cement building materials used in the exterior and interior of residential and commercial buildings. The company is also the largest seller of home siding (imitation wood) in the US, and produces fibre cement in the US, Australia, New Zealand and the Philippines. On 17 May, JHX announced a 5% share buyback, and will resume dividend payments following its second quarter results in November. An interim dividend will be paid after the second quarter results, whilst a further dividend will be paid following its full year results in May 2012. The buyback will be conducted on-market during the next 12 months, and is designed to optimise JHX’s capital structure. JHX also reported that its net debt fell to an unaudited US$40.4 million by March 31, down from US$134.8 million a year earlier. James Hardie was one of the market’s hot shares ahead of the buyback announcement. Click for Daily FREE hot shares recommendations. May 17, 2011
Industrials Stocks News Leighton Holdings (LEI)
Leighton Holdings (LEI) is one of the world’s major contracting, services and project development organisations, and also the world’s largest contract miner. LEI owns six diverse and independent companies: Thiess, Leighton Contractors, John Holland, Leighton Asia, Leighton International and Leighton Properties and has significant interests in Al Habtoor Leighton Group, Devine and Sedgman. LEI announced massive write-downs of its assets just over a month ago, and it has been one of the shares to sell since October last year. On 16 May, LEI said it expects to resume dividend payments in FY12 despite reporting an unaudited $382 million loss for the nine months ending March 31. The group forecast an FY11 net loss of $427 million, although it anticipates a $600 million - $650 million profit for the FY12. Leighton Holdings based its optimistic guidance on a positive macroeconomic outlook, underpinned by increased infrastructure spending in Australia. Click for FREE Stocks Advice.May 16, 2011
ASX Hot Stocks News St Barbara (SBM)
St Barbara (SBM) is an Australian gold producer and explorer. SBM’s primary assets are its Southern Cross and Leonora operations, both of which are located in Western Australia. The company also purchased the Gwalia (WA) mine in 2005, which has become a main focus. On 13 May, SBM made a takeover offer for Catalpa Resources (CAH). The part scrip/part cash offer valued CAH at $349 million ($1.92 per share), representing a 41% premium to CAH’s closing price on 10 May. CAH advised its shareholders to take no action but did signal that it believed St Barbara was opportunistically trying to take advantage of its weak share price. Nevertheless, CAH advised that it will hold further talks with SBM in the coming weeks. CAH was one of the market’s hot stocks on the day, surging more than 20%. Click for more Hot Stocks.May 12, 2011
ASX Top 200 News 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. On 11 May, BLD reaffirmed its full year profit guidance of between $160 million and $175 million. BLD had weathered the impact of weather-related delays and a soft residential market in Australia. The group was also benefiting from the soaring dollar, unlike some of its peers in the share market. Click here for free daily trading recommendations.May 11, 2011
Stocks to Sell OneSteel (OST)
OneSteel (OST) is an Australia manufacturer of steel and finished steel products and is also a leading metal distributor. OST, which was spun out of BHP in October 2000, markets products used in the construction, manufacturing, housing, mining and agricultural industries. On 10 May, OST downgraded its full year guidance due to the strong Aussie dollar. OST said that the dollar’s strength had hurt its steel margins and iron ore revenue. Indeed, OST has been one of the shares to sell over the past year due to the soaring dollar. Furthermore, its iron ore operations have been impacted by adverse weather in the second half. As a result, OST now expects full year earnings to be around $270 million, down from its previous forecast of $232 million. Click here for further Shares to Sell tips.May 10, 2011
Materials Stocks News Incitec Pivot (IPL)
Incitec Pivot (IPL) is Australia’s largest supplier of fertilisers and is involved in the manufacture, distribution and sale of fertilisers. The company is roughly divided into three divisions: Dyno Nobel (mining, quarry, construction and geophysical exploration services); Fertilisers; and Southern Cross International (focused on sales to Australian distributors and export sales). IPL was one of the hot stocks in 2010 amid hopes of increased demand for its fertilizer products due to Asia’s economic growth. On 9 May, IPL reported a 22% increase in underlying profit from the prior year. The $178.6 million result came on the back of a 15% growth in revenue. Core earnings at IPL’s explosives division grew from a year earlier amid a modest recovery in US volumes. IPL expected full year earnings to be biased towards the second half, whilst it was positive about the outlook for soft commodity prices. IPL also declared an interim dividend of 3.3 cents per share, up from 1.8 cents a year earlier. Click for furthur FREE Stocks AdviceMay 9, 2011
Blue Chip Shares News Corp (NWS)
News Corp (NWS) is a diversified media conglomerate with interests all over the world and in most facets of media. NWS thus has a wide range of household name services and assets under its belt, including Fox Filmed Entertainment, Twentieth Century Fox Television, Fox Sports, book publisher Harper Collins, the New York Post in the US, web services Photobucket and MySpace, and Dow Jones. The group is also considered a blue chip stock among global investors and is one of the biggest companies in the Australian share market. Last week, NWS advised that third quarter net profit fell 24% from a year earlier to $639 million. The profit result missed analyst estimates. The result came on the back of a 6% decrease in revenue, which NWSattributed to weakness in its filmed entertainment and publishing divisions. However, the cable division was a bright spot, with operating earnings rising 25% on-year amid stronger advertising revenue. Click for more FREE Shares Advice.May 6, 2011
ASX Stocks to Buy Flight Centre (FLT)
Flight Centre (FLT) is Australasia’s best known travel agency group, with operations across nine countries. FLT’s main operations are in Australia, New Zealand, Canada, the USA, the UK, South Africa and Hong Kong. FLT’s stock plunged over 2008 due to weakening travel activity as part of the global economic downturn and sluggish consumer spending. A return to global economic stability has boded well for FLT and its travel sector peers. Moreover, a strengthening Australian dollar – which has hovered around 110 US cents of late – will mean that airlines such as QAN will now really benefit from the fall in oil prices. The climbing Aussie dollar is also enticing Australians to start thinking about overseas travel again and airlines are also benefitting from a turnaround in passenger numbers. Earnings centred In February, Flight Centre impressed the market by announcing record first half results. Profit before tax increased 37%, to $101.1 million, whilst net profit after tax increased 38%, to $70.5 million. Both numbers easily surpassed the company’s previous first half records, with first half earnings per share reaching 70.6 cents, up from 51.3 cents. The company declared an interim dividend of 36 cents, up from 26 cents a year earlier. Last month, FLT announced it expects FY11 pre-tax profit to be 10% - 20% higher from the prior year. FLT noted that its guidance for a full year result of $220 million - $240 million was not materially impacted by the recent natural disasters. The Australian division reported strong operating conditions, due to a combination of lower priced airfares and a strong Aussie dollar. Although higher oil prices have prompted airlines to increase airfares, we feel the effect of the stronger Aussie dollar is enough to keep Australians travelling. Looking ahead With the global economic downturn becoming a distant memory and consumers willing to spend on flights again, FLT’s fortunes have turned around, as evidenced in the group’s recent strong results and guidance. The group remains on track to achieve an FY pretax trading result of $220 million to $240 million. Improving economic conditions would see FLT’s earnings continue to impress, making it one of the stocks to watch. FLT’s wholesale operations have performed well and delivered solid margins over the past year, and generally the leisure and wholesale travel businesses have performed well. The global corporate travel sector is seeing signs of improvement, with Flight Centre continuing to win new corporate accounts, putting the group in a strong position when the market recovers. Click for more FREE ASX Stocks to Buy Tips.May 5, 2011
ASX Mining Shares News Macarthur Coal (MCC)
Macarthur Coal (MCC) is a coal miner, supplying low volatile pulverized coal injection coal (PCI coal) to the steel mills of Asia, Europe and Brazil as well as some thermal and coking coal. Its primary focus is production at the Coppabella and Moorvale coal mines located near Moranbah in Queensland’s Bowen Basin, which together provide approximately 47% of the PCI coal exported from Australia. Along with many of its mining peers, MCC has been one of 2011’s shares to sell due to the impact of the Queensland floods on its production. On 4 May, MCC forecast FY11 net profit to be around 50% higher than the previous year’s $125.1 million result. Although the group expects full year NPAT to be between $185 million and $205 million, production guidance was lowered to 4.1Mt – 4.3Mt, from the previous 3.8Mt – 4.0Mt. MCC blamed the production downgrade on extreme wet weather in FY11. Click for more Mining Shares Tips.May 4, 2011
Shares to Sell News Fairfax (FXJ)
Fairfax (FXJ) is a leading Australian media company with a range of prominent newspapers such as The Sydney Morning Herald, The Age, and The Australian Financial Review. On 3 May, FXJ warned that full year operating earnings are expected to be 6.1% lower than the prior year. FXJ anticipates FY11 EBITDA to be $600 million, down from FY10’s $639.1 million. The group said second half revenue was down 4.5% so far amid lower advertising levels, whilst operational costs were tracking higher due to the development of new iPad applications. A stronger Australian dollar was also weighing on earnings, in addition to the poor cyclical trading conditions. Fairfax was one of the market’s shares to sell on the day of the update, sinking 8%. More Share Tips.May 3, 2011
Materials Stocks News Orica Ltd (ORI)
Orica Ltd (ORI) is a leading Australasian manufacturer of industrial and specialty chemicals, agricultural chemicals and fertilizers, commercial explosives and mining chemicals, and other consumer products. Recently, ORI saw its first half underlying profit rise 5% on-year to $264 million. The result matched analyst expectations. Driving the result was a recovery in volumes across some of ORI’s markets, aided by better pricing and productivity improvements. However, the result was impacted by the strong Aussie dollar, which wiped $17 million off the company’s earnings. Orica said commodity demand was underpinning growth in its business, and that it expects FY11 profit to exceed FY10’s result, subject to forex movements and the rate of global economic growth. An interim dividend of 37 cents was declared. ORI shares rose 2.5% on the day of the announcement, making it one of the better performers in the Australian share market. Click for more FREE Stocks Tips & Advice.May 2, 2011
Stocks to Watch Macquarie Group (MQG)
Macquarie Group (MQG) is Australia’s largest and leading investment bank and is considered among the market’s blue chip stocks. MQG has evolved over time into a complex portfolio of businesses which include banking, investment banking, asset management and private equity. On 29 April, MQG reported a 9% fall in FY11 net profit to $956 million, slightly ahead of its previous guidance of a $947 million profit. MQG blamed the poor result on subdued equity market activity and higher costs. Earnings did recover in the 2H11 though, with profit rising 37% from the 1H11. The group also declared a final dividend of $1.00 per share (unfranked), which was ahead of analyst estimates of an 87.6 cent dividend. Macquarie Group said it was more optimistic about the FY12, although the outlook was dependant on market conditions and the performance of its investment banking division. Nevertheless, it will be one of the stocks to watch if market conditions ultimately do improve. Click here for more FREE Stock Tips.
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