The Hot Stocks of 2008

From Daily Telegraph

By Andrew Carswell

December 15, 2007 12:00am

IT is the question economists and investors alike have been peddling for some years now.

When will this unprecedented bull market come crashing to a prolonged halt?

The increasingly buoyant Australian stockmarket is just about to complete its 17th year uninterrupted of growth and upward momentum.

To state the bleeding obvious, we are getting closer and closer to a major downturn that could make the August 07 mini-collapse look like a storm in a teacup.

Despite this, analysts remain convinced market growth will continue fervently throughout 2008, as the local bourse finally digests the sub-prime hiccup and matures relatively unabated.

So if now is a good time to invest, what should one be looking at?

Well, today The Daily Telegraph makes it easy for you.

Australia's leading analysts have given the inside word on the hottest stocks for 2008.

Craig James, Commsec

Rio Tinto (RIO) - Subject to takeover speculation from rival BHP-Billiton and rumours of takeover bids coming from China. Will also continue to benefit from Chinese industrialisation. Current: $137.24; Year High: $149.99 (Nov 07); Year Low: $69.35 (Jan 07).

Graincorp (GNC) - Hit hard by the drought in the last six months, but expectation of better seasonal conditions in 2008 should lift the stock beyond its highs. Current: $9.65; Year High: $14.12 (Jun 07); Year Low: $8.71 (Dec 06).

Leighton (LEI) - Significant work in progress, particularly in the cash-rich Middle East, and order books more likely to keep growing. Also benefits from Chinese industrialisation. Current: $63.40; Year High: $65.62 (Dec 07); Year Low: $19.24 (Jan 07).

Harvey Norman (HVN) - Will continue to benefit from digital good deflation and high Australian dollar. Current: $6.94; Year High: $7.25 (Nov 07); Year Low: $3.75 (Dec 06).

CSL (CSL) - Dominates global market for blood plasma products. Current: $35.87; Year High: $38.05 (Oct 07); Year Low: $18.99 (Dec 06).

Rick Klusman, Aequs Securities

Brambles (BXB) - Massive buyback and continued corporate interest to support stock. Has yet to reach full potential. Current: $11.70; Year High: $14.93 (Oct 07); Year Low: $10.60 (July 07).

Sinovus Mining (SNV) - Australian company investing in China. Has large silver prospects and is closing in on production. Newly listed. Current: 19c; Year High: 21c (Dec 07); Year Low: 19c (Dec 07).

Regional Express (REX) - The forgotten airline in a climate of unprecedented growth. Is Australia's dominant regional airline with limited competitors and is a mining boom beneficiary. Current: $2.02; Year High: $2.88 (May 07); Year Low: $1.44 (Dec 06).

Credit Corp (CCP) - Major debt collection agency that has been hammered this year, dropping its value by more than half. Big hopes for a strong 08/09. Current: $5; Year High: $12.99 (Jul 07); Year Low: $5 (Nov 07).

Strathfield (SRA) - Sydney-based car audio retailer. New management and franchising showing improved returns. Current: 4.3c; Year High: 7.2c (Jan 07); Year Low: 3.5c (Sept 07).

Merrill Lynch

News Corp (NWS) - Has new concrete earnings drivers, largely from MySpace and Sky Italia, and plenty of upside in the filmed entertainment division and cable networks. Current: $24.28; Year High: $32.60 (Feb 07); Year Low: $23.48 (Nov 07).

Bluescope Steel (BSL) - Expecting upside to steel prices, and if that comes, BSL doesn't need a big improvement in downstream profitability to reap the rewards. Current: $9.48; Year High: $12.65 (May 07); Year Low: $7.98 (Dec 06).

Alumina (AWC) - Offers the best exposure to its commodity with world class, low cost, long life bauxite and alumina assets. Analysts very bullish on the aluminium price outlook. Is also a potential takeover target. Current: $6.21; Year High: $8.88 (Jul 07); Year Low: $5.90 (Aug 07).

Macquarie Group (MQG) - Leverage to Asia looks enhanced and set to drive further strong growth, further opportunities to exploit pension fund demand for unlisted funds, and capital and asset turnover improvements all point to a strong year. Current: $80.08; Year High: $98.64 (May 07); Year Low: $61.90 (Aug 07).

Babcock & Brown Power (BBP) - Many reasons . . . spike in electricity prices likely over summer; its valuation looks attractive, as its focused on gas-fired generation, is well placed heading into a carbon-constrained Australia, and has excellent medium term growth options. Current: $2.75; Year High: $3.80 (May 07); Year Low: $2.49 (Aug 07).

Peter Switzer, Switzer Financial Services

Westpac (WBC) - A company that has been a positive performer and the arrival of Gail Kelly as the new CEO should give the bank a spring clean effect. Her track record at St George was outstanding. Current: $29; Year High: $31.32 (Nov 07); Year Low: $23.35 (Aug 07).

BHP-Billiton (BHP) - The company continues to play a strong hand with a global economy driven by demand for commodities. Current: $42.05; Year High: $47.70 (Oct 07); Year Low: $23.86 (Jan 07).

Babcock & Brown (BNB) - A company whose many offshoot listed companies have been given strong thumbs up from expert analysts who understand the complexities of the niche industries they operate in. Current: $27.42; Year High: $34.78 (Jun 07); Year Low: $17.60 (Aug 07).

Oxiana (OXR) - A gold and copper producer and most of my broker colleagues believe 2008 will be another year for commodities. Often mentioned in dispatches. Current: $3.80; Year High: $4.32 (Nov 07); Year Low: $2.60 (Mar 07).

Destra Corporation (DES) - My only small cap, speculative stock offering. I have interviewed its CEO, Dominic Carosa, and he is a very tech-savvy guy who understands the new media. And the likes of Lachlan Murdoch and Prime Television have bought into the company. Current: 27c; Year High: 43c (Jul 07); Year Low: 20c (Mar 07).

Fat Prophets

Cockatoo Coal (COK) - When all the takeover activity settles, emerging players like COK will come into play in the sector. The market will start to appreciate the value of its currently stranded coal reserves in Queensland. In addition, Cockatoo's board and share register reads like a resources who's who. Current: 63.5c; Year High: 68c (Dec 07); Year Low: 15c (May 07).

Mundo Minerals (MUN) - This emerging gold producer is set to produce its first gold from its brand new Engenho gold project in Brazil early next year. We would anticipate a significant re-rating once production commences. Current: 79c; Year High: 93c (Oct 07); Year Low: 25c (Feb 07).

Image Resources (IMA) - We believe 2008 will have more interest in mineral sands, a commodity that tends to move later in the commodity cycle. This is our best bet in the sector as it is a one-stop shop for a mineral sands player wanting to significantly boost its reserve base. Current: $1.88; Year High: $2.62 (Feb 07); Year Low: $1.45 (Aug 07).

Coeur Dalene (CXC) - We remain bullish on precious metals, including silver, and believe Coeur provides investors with solid exposure with its lucrative operations in North and South America and Australia. Current: $4.91; Year High: $5.20 (Dec 07); Year Low: $4.91 (Dec 07).



Credit Suisse

Tower (TWR) - The multi-pronged insurer has back-tracked all year and should be tracking towards a $3.54 target. Current: $2.03; Year High: $2.39 (Feb 07); Year Low: $1.61 (Nov 07).

Iluka Resources (ILU) - Has eight mining operations and six processing operations centred around mineral sands. Current: $4.43; Year High: $6.89 (Dec 06); Year Low: $3.91 (Nov 07).

Record Realty (RRT) - An investment vehicle managed by Allco targeting properties with stable long-term cash flows from tenants. Current: 68.5c; Year High: 95c (Sept 07); Year Low: 68.5c (Dec 07).

Zinifex (ZFX) - Recently moved from the sell pile due to its backtracking. Current: $14.05; Year High: $21.60 (Jul 07); Year Low: $13.74 (Nov 07).

Perilya (PEM) - The owner and operator of the Broken Hill zinc, lead and silver mine. Strong year predicted. Current: $3.26; Year High: $5.80 (Jan 07); Year Low: $2.76 (Nov 07).

Predictions for 2008

Top 10 from the Australian
http://www.theaustralian.news.com.au/files/stocks2008.pdf

Gold Related Information

Gold Information Sites:
http://www.gold-eagle.com/

http://www.goldsheetlinks.com/

What's driving Gold:
http://www.usfunds.com/landingpages/whats_driving_gold/