Newcrest Mining (NCM)

Analyst: David Lennox, Fat Prophets

Recommendation: Buy

Thursday’s close: $38.66

Comments: On the back of the strong gold price and the inclusion of the Lihir assets, Newcrest has reported a record profit. Shareholders will get a little extra, with a 20c per share special dividend in addition to the final dividend of the same amount. Newcrest’s new chief executive Greg Robinson has laid out a five-year plan for the company that envisages annual gold production in excess of four million ounces and copper production above 150,000 tonnes. With total resources above 147.5Moz of gold, almost 20Mt of copper and a comprehensive portfolio of growth assets, Newcrest should be in any basic investment portfolio.

Macmahon Holdings (MAH)

Analyst: Trent Barnett, Hartleys

Recommendation: Accumulate

Price target: 77c

Thursday’s close: 62c

Reason: Substantial earnings growth ahead

Comments: Macmahon reported net profit after tax of $A1 million, in line with guidance. It has a very strong order book of $2.8 billion. We forecast 2011-12 revenue of about $1.5 billion and 2012-13 of about $2 billion. However, the capital expenditure to achieve the growth is substantial (we estimate about $150 million per annum for the next three years). We believe the current balance sheet will be stretched to achieve our growth forecasts. Consequently, investors need to be confident that debt facilities can be extended. Otherwise it seems possible that the company requires a modest equity injection to achieve our growth forecasts.