Aero Inventory Share Discussion Threads

[robsy2] 20/1/2009 16:15

US $ Libor Rates are still falling
Date 1m 3m 6m 1yr
19 Jan 09 0.35500 1.13250 1.55625 1.85125

and the US$ is still strengthening against GBP at 1.43 ish.

both good trends for us.
If you look at the Libor rates eg 1year, you can see how from 1-07-07 to now they have gone steadily down from 5 point something down to 1.85.
We have more debt during this financial year than in ye 2008 (therefore more sales)but at lower average cost therfore more profitable. Bodes well.

[nurdin] 18/1/2009 12:05

Consensus is for a divi of 23p for the year to March 09,rising to 26.5 for 2010.That translates to a prospective yield of just over 10% at the current price of 280p.

Prospective pe is still around 3.2, based on Edisons earnings estimates of 88p for the year to March 2010.However Numis, their house brokers, have a very bullish projection of 119.4p.But before we get carried away ,it seems to me that they havent revised their previous forecasts after the interim so it is better to err on the cautious side.

Whichever estimates you take,AI. look grossly undervalued here imo.

[a0469514] 16/1/2009 12:54

The ADVFN 'Financials' data (which you can access at the top of this page) was wrong until today. They were showing a dividend last year of much less than 18p and hence the yield calculation was wrong too. I bought some 2 weeks ago and if I had known the yield was as good as it is I would have bought more.
Still when I emailed them they corrected the figures immediately so I think they are more or less correct now. They still show a dividend payment on 17 March 07 which shoudn't be there though.

They show what is, on the face of it, some very detailed and comprehensive data on every share. If they cannot get something as basic as past dividends right though it does make me wonder about the value of their Tobin's Q Ratio of 0.2 or their Quick Ratio (Acid Test) of 0.63 not to mention their Dodds-Graham ratios.

Xylos

[nurdin] 16/1/2009 10:35

Looks like its heading back to £3 :o)

[nfs] 14/1/2009 19:55

its all about the debt situation and the company's ability to manage the initial negative cashflow on contracts given that Lloyds TSB is the bank.Also the expected airline industry problems in a downturn and the risk-albeit surely very small-of one of the clients going bust.Otherwise its on such a small PE and large divi that the drive down in share price seems illogical-a private equity group wanted it -Bridgepoint I think- and that's a sign of quality.I'm thrilled to get in under £3 on such good looking forecasts and longer term trends

[robsy2] 14/1/2009 12:15

Well thats pretty good then isn't it?

[nurdin] 14/1/2009 12:03

That is correct...:o)

[robsy2] 14/1/2009 11:57

Thanks Nurdin
OK lets assume as house brokers Numis can do a pretty good guestimate and nothing untoward happens ...What have we got?

(US $ and millions), we have pre-tax of 103,less tax at 30% gives post tax 72, shares in issue is 50.6,so fully diluted eps is 1.43 cents or about 95pence. share price is 300p so its on a prospective per of 3.15.
Is that right?

[nurdin] 14/1/2009 11:35

Numis,their house brokers are forecasting a pretax of £69m..which translates to about $103m

[robsy2] 14/1/2009 11:31

The Mail report says the company should make 100m $ US for year end 30.6.09.
Does anyone have any more info on? Maybe its from Charles Stanley , who are tipping AI. at the moment and are probably behind the Mail article.

I mean I hope its true because its a lot more than anyone has been predicting.

Jeremy Batstone-Carr, of Charles Stanley, says: 'Although the group is not recession proof, a full year contribution from recent contracts should drive this year's results. First quarter sales were up 80%. We may have missed something, but, if so, we are in good company as the directors have been buying. We expect new contract wins which should drive future growth.'

Any ideas?
R

[johnrxx99] 13/1/2009 00:11

What a very rewarding few days. RSI getting rather hot so, in this market, always tempted to take a smidgon of profit.

[mdj8] 12/1/2009 16:58

Boosters, SimonRK? Most of the people posting are the same old voices who bought in around £5- up to a year ago. If they can hold from £5- to £2- over 12 months I'm quite sure they can hold for as long as it takes until they consider the price is right.

[pallett] 12/1/2009 16:05

I have been delighted to have sold these at £6.93 in Nov 2007 and even more delighted now to buy them back at £2.20 odd. I hope with the yield they are on they will be the "Corner Stone" of my new dividend producing portfolio.

[simonrk] 12/1/2009 13:47

I'll sell when the price is right. I'd be intersted to know how many of the boosters on here could hold out to £10.

[cockneyrebel] 12/1/2009 12:26

agree Nurdin - the time to buy a share is when the bb is quiet, I'll sell these when there's 50 posts a day and all the punters are over excited.

CR

[schlemiel] 12/1/2009 12:19

what a stock, what a company

[nurdin] 12/1/2009 12:17

This board is strangely quiet :o)

Rating of 10x this years earning could push the share price to over £8...and 10x is a very modest rating for the growth the company is likely to achieve going forward.

No harm hoping :o)

[cockneyrebel] 11/1/2009 14:51

Ah - the rush of posts scrolled up while I was posting to boxerdog2 so i missed that nurdin :-)

ta

CR

[nurdin] 11/1/2009 14:23

It must be sunday :o)

Posted that earlier...

[cockneyrebel] 11/1/2009 14:20

Tipped as a buy in the Midas column in the Sunday Mail apparently.

CR

[cockneyrebel] 11/1/2009 12:55

goes xd in May for the interim divi.

CR

[boxerdog2] 11/1/2009 12:44

Thanks for that CR. Should see a fair spike in the morning. When is the next divi due?. Cheers BD.

[cockneyrebel] 11/1/2009 12:34

Yes, 12p final divi and a 6p interim divi making 18p for the year last year.

CR

[boxerdog2] 11/1/2009 12:24

Spotted the write up very interesting. States a divi of 18p last year rising to 22p this. Can anyone confirm they received 18p last year as after very basic research i can only find a 12p divi payment.

[bigbigdave] 11/1/2009 11:05

Ta Nurdin, looks like I'll be paying a bit more than I anticipated 8-)
Might have a rethink, don't like buying after tips.

Aero pays a generous divi Aero Inventory is a bit like Marmite. Brokers either love or hate the company, which supplies and installs spare parts for aeroplanes.
It works with carriers such as easyJet and Qantas and has grown rapidly in recent years. The group joined Aim in 2000, since when it has increased sales from about $7million (£4.6million) to $440million and profits from virtually nothing to $73million last year.
The group reports in dollars because that is the principal currency used by the airline industry. It is expected to deliver profits of more than $100million in the year to June 2009.
Aero Inventory is also committed to a progressive dividend policy. Last year it paid out 18p. This year it is expected to pay 22p, rising to more than 24p in 2010. As this stock is 278¾p, it is yielding just less than eight per cent.
The share price has suffered in recent months for two main reasons. First, the group has a loan facility with Lloyds TSB of up to $500million and some brokers find this scary. But the loan is reasonably priced and there is not the slightest indication that the company will be unable to service the debt.
Aero has been using the money to buy aircraft parts, but it should become increasingly cash generative over the next few years.
Second, the group was approached by a private equity bidder last June, sending the share price up, but it fell when the approach was rejected by the management, who deemed it unlikely to amount to anything concrete.
Midas verdict: Airlines have been outsourcing everything from catering to baggage handling and spare parts are an obvious next step. Some, such as Qantas, have already made the move. Others are likely to do so in the future. Aero Inventory is the only company in its field, so it should do well. The company is also a clear bid target for an aircraft manufacturer. The airline business is never without risk, but this stock is cheap and the dividend is generous. Buy.