Aero Inventory Share Discussion Threads

[sleveen] 29/10/2008 14:01

yf23 is it possible to put your daily candlestick chart into the header?

Thanks for your chart comments BTW

[yf23_1] 29/10/2008 14:00

..and if you connect the tops and bottoms of last 4 days trading range yout get a triangular wedge.
So it could be quite violent when it breaks (one way or the other, LOL!).

[yf23_1] 29/10/2008 13:57

..chart update


Well, we still haven't broken into the body of the t-4 candle (the one before the hammer) so we're still waiting for bullish confirmation.
However, the last 4 days candles are so similar in story to bullish scenarios to indicate a new bullish trend about to happen.

Morning doji star


Bullish hammer


Abandoned baby

[mdj8] 29/10/2008 11:38

darlocst, I would be disappointed if they cut the dividend as it may precipitate a lack of trust/faith in the management. One of the good things going for this company is that they have indicated they are not disposed to raising additional capital through further listings and consequent dilution of existing shareholders. They currently have approx $90- left of their $500- facility (which incidently is worth 25% more GBP than it was a few weeks ago) further they have approx $591- worth of stock on hand that is already paid for. A major point though is that digesting/integrating huge businesses like Qantas and latterly ACTS requires a great deal of focus to be done efficiently and successfully - to do this right takes priority over acquiring new business. Once comfortable they will move on to the next business opportunity when they will also, as a result of using stock on hand, have enough capital to buy the stock of their new client. In short they are being very wise in not taking new business on willy nilly which apart from anything else would cause significant cash flow problems - not a few companies have failed from taking on too much despite their amazing sales "success".

[darlocst] 29/10/2008 11:17

Given the facts they will find it hard to raise more debt which will constrain future growth & that they haven't been cashflow positive up to now they may very well consider cancelling the dividend and using that saved cash towards possible future contract wins.

I think that may actually be a positive step, no point paying out dividend money if that could be used more productively in expanding the business (new contracts generate 30%+ IRR according to the last presentation).

I hope the management are considering that. What do others think?

[robsy2] 29/10/2008 10:54

Poor DW

He comes on here and gets a fly in his ear!

DW I can't see you getting an opportunity at 160p. At 2 quid ish its yielding an astonishing 9% covered 3 times on last years earnings, this years earnings should be comfortably ahead, so that divi looks safe enough, in fact it could go up 20-30% as in previous years.Of course a lot of companies have fat prospective divis but I suppose not all of them will be able to pay them. Here we will get our next one of 12p on 12th December,just in time for Xmas so at least thats a certainty, provided you are on the register by 14th November.

It is hard to see how this can remain listed with a per of about 3 and a divi of 9%.

yours bullishly but consistently wrong to date
R2

[sleveen] 29/10/2008 09:17

DW

ATC have given permission for take off.

[davidwilkin] 29/10/2008 08:57

No offence intended, i looked at these what feels like about 6 weeks ago when they were trading at 440 ish, i didnt add them to my watch list because i thought they looked too expensive, remembered about them at the weekend again and was amazed by the fall in price, hence the comment....good luck to all holders.

[mdj8] 28/10/2008 22:18

You have to admit jumping in with "Now on my radar" as an introductory statement could easily be construed to make one sound rather full of ones self. As for cheapness I think most of us would say it's cheap at anything under a fiver in the current market. Even if you don't see the 160- level after New Yorks performance tonight its worthy of consideration.

[davidwilkin] 28/10/2008 21:29

MDJ8, just pointing out that it now looks cheap, although the ROCE figure does not read very well, i'll be buying around the 160p level.

[yf23_1] 27/10/2008 23:17

Although the current candlesticks do not exactly match the following 2 scenarios, they are similar in nature. We had the hammer yesterday (t-1) and today we bounced off the 200. Todays harami is showing us that we have support but having ventured into the body of the (t-2) candle we have indecision. A close tomorrow in the body of the (t-2) candle should indicate a trend reversal.

[mdj8] 27/10/2008 17:19

"Now on my radar" - big deal, whats the significance of that statement, got something of value to add?

[davidwilkin] 27/10/2008 17:03

now on my radar.....how low will it go.

[robsy2] 27/10/2008 09:06

We might see a higher close here today for the first time in ages.
I have followed the directers lead, raided the kids savings and bought a few more.
I see their buys as a clear signal to existing investors and the market that enough is enough and that all is well at AI.With the ex rate bouncing around the decision to report and fund the biz in US$ looks very smart.The way sterling is deteriorating means we get a massive Sterling earnings hike for nothing anyway this year. Thats not counting psssible new contracts that are in the offing....
The divi of 12p a share is due to holders who are on the register at 14th November so thats 6% return payable on 11th December wich is pretty good.
We also have the AGM coming up which would be a good time to reassure the market and break some good news, if there is any.
All the big shareholders seem to be staying put.
Your as bullish as ever!
R2

[mdj8] 27/10/2008 07:55

Lets see if we gert a higher close today then.

[yf23_1] 25/10/2008 12:12

There you are, first proper candlestick hammer in 6 months (although there is a very slight upper wick).

[sleveen] 25/10/2008 07:43

Looks like James Bartolomew and I were thinking along the same lines I bought at 278p; bit of a shock to see 180p yesterday, though a nice rebound from midday lows.

I think a lot of the market panic is because of the need to liquidate share holdings to get the cash to pay off other debt.

I live not far from Manchster airport, the planes are flying over as I write...too high to see if any are QANTAS or ANA, but peeps are still flying.

Good luck all.

[yf23_1] 24/10/2008 19:07

Nice intra-day rebound should elicit a hammer botom on the candles

[mdj8] 24/10/2008 18:56

Telegraph today - Last para.....

Financial crisis: 'President Clinton's actions are partly responsible for the crisis we face'
It is frightening to see large chunks of one's wealth disappear overnight. I have lost, regained and re-lost sums of money that are, to me, very substantial.

By James Bartholomew
Last Updated: 3:25PM BST 24 Oct 2008

President Clinton?s actions are partly responsible for the crisis we face.
It is worrying, too, not to know just how bad it might get. I find myself looking at my house and thinking, "Gosh. I still have that. The house is still standing." Thank goodness the mortgage is covered by my holdings of cash and bonds.

There are some people, of course, who face potential bankruptcy if they lose their jobs and thus their ability to pay their mortgages. All this has happened with amazing speed. Some days I don't look at the online valuations of my holdings. No point overdoing the depression. I now bless every sale I made in the past two months and try not to become too angry with myself about the unfortunate purchases.

The market has reached the stage where everything is being hit. It is not like 2000 when hugely overpriced dotcom shares – quite rightly – fell. Almost any share that is left standing, including ones with good prospects and on low valuations, is sold. That is because those who have lost a lot of money want or need to sell anything to raise cash.

I have made some bad decisions recently. I bought into Lloyds TSB when I thought it had done a good deal buying HBOS. I sold when it seemed to be going awry but then bought into HBOS as it was at a big discount to Lloyds, based on the original terms of the takeover. At the time, the takeover seemed increasingly likely to be pushed through.

But then both banks were crucified by the Government. They were "rescued" with preference shares issued to the Government yielding an extortionate 12pc. As economist Tim Congdon remarked, this was "theft". The terms contrast with the far more generous deal that saw the Swiss government help out UBS. But then the Swiss government is not peopled by fundamentally anti-capitalist politicians egged on by the BBC.

This is not a political column. However, it is horrible for me, as a private investor, to hear BBC presenters nearly always taking an anti-capitalist, anti-shareholder line. They seem to take a delight in this crisis of capitalism and have no interest in the degree to which this is ascribable to mistakes of government.

For an introduction to this subject, it is worth noting that the New York Times of September 30, 1999, reported that Fannie Mae, the biggest underwriter of American mortgages (and semi-government controlled), was going to "encourage banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans". That is at least part of the origin of the subprime lending crisis. It was brought to us by President Bill Clinton.

However, as President Charles de Gaulle said: "It is necessary to accept the world as it is." The stock market trend is down and we do not know when it will be reversed. I can't see it happening any time soon. There have been and will be rallies. But so far they have been destroyed by selling by people who wish they had sold at the higher level.

There is some light at the end of the tunnel. Interest rates will surely be slashed. Tim Lee, a US economist, thinks interest rates will fall to zero there. I wouldn't be surprised to see them fall to 1pc here. At some point it will seem crazy to get, say, 2pc on a deposit account while BP yields, say, 7pc. But this will all take time to work through.

Some shares are going from "good value" to "cheap" and then "absurdly cheap". I bought more Aero Inventory at 280p last week thinking it was "absurdly cheap". The shares then fell to 235p. I have sold all my Lloyds, HBOS and HSBC. I have sold my Carnival and the last of my Bumrungrad Hospital in Thailand (a wonderful investment over the years, despite its name). As I write, I am 40pc in cash and bonds. Good luck to us all.

[sleveen] 24/10/2008 18:11

They'd be right then

[azalea] 24/10/2008 17:26

With 4 directors buying today, even they must think the shares are cheap!

[robsy2] 24/10/2008 15:25

Nice post ,a little bit of perspective.The markets seem to have liked the post anyway!
Anyway earnings are flying at now that sterling is sinking.

I saw this today and thought I'd pass it on,



It shows the international freight and passenger travel stats for the industry under the heading "Alarming drop in September figures".
September figures are not good but the industry is still up on the year. To be honest I found them quite reassuring rather than alarming. Its not as though demand has fallen off a cliff and you are left with no customers and a whole load of costs, like mortgage approvals in UK in September which apparently went down 95% year on year , that is alarming.

[jr hartley] 24/10/2008 13:01

AI.'s being dragged down with the overall market but its worth noting the following:

From the balance sheet for year end 07/08:
Looking at current assets:
Stock($690.1m) + Debtors($96.8m) + Cash(1.2m) = $788.1m
Total liabilities = $553.4m
Current assets - total liabilities = $234.7m
Shares in issue including possible dilution = 50m approx
Current assets - total liabilities / shares = $4.7 per share = £2.94 at current exchange rate.

At todays price £1.90 - £2 this is an absolute long term steal. A £1 discount to real value without factoring in current dividends or future earnings potential. Wish I had more cash!

[azalea] 24/10/2008 11:39

It would appear that the movement of the share price is opposite to that of the $.

[robsy2] 24/10/2008 08:46

MD
Coming back to your point about the ex-rate , things are really on the move there. Lets make a few assumptions, If the rate stays the same as we are at now and expected increases in business this year, ana etc,but no big new contracts,are offset by extra finance costs leaving eps 2009 the same as 2008 ie 108cents the reported earnings in sterling would be 63p with unchanged dividend of 18p say.
That would be a pretty dissapointing result given the performance over the last 5 years but it still leaves us on a PER of 3 and a bit with a divi of 6%.
I know there are problems in the aviation industry but ........