Aero Inventory Share Discussion Threads

[robsy2] 10/3/2009 18:13

CR
Just had a peep on the CS website and this is their report from Jan 09 nothing new but they were buying at 280p.


and the AERO INVENTORY (AI.L) (*AIM) –Buy
Basic data
Price 280p
52 week range
High 655p
Low 178p
Market Capitalisation £133m
Est. P/E 2009 3.5
Est. Net Yield 2009 8.3%
RIC Code AI.L
The company, which provides a full
management service for aircraft
spare parts, has an excellent
growth record. In the year ended 30
June 2008, pre-tax profit advanced
by 60% to $73.1m, while revenue
increased by 78% to $440m.
Although gearing is high at 130%,
we project that this should fall to
just over 100% at 30 June 2009,
provided there are no major new
contracts. There is significant
headroom in the finance facility. A
risk is that Aero Inventory has only
five major contracts, but the
contracts are long-term. The
financial results are reported in US
dollars, so that the weakness of
pound means higher sterling
equivalent profits in the current
year. In the first quarter of 2008/09
sales were up by 80%. We note
also that the directors have been
buying the shares. We expect new contract wins and believe that
the shares are cheap. Buy.

[robsy2] 10/3/2009 17:08

Here is an extract from AI customer Haecos results released today. Demand solid , some slowdown noted, but more capacity expansion in 2009 and beyond. Pretty encouraging.

HAECO reported a profit attributable to shareholders in 2008 of HK$1,138 million, an increase of 6% on the profit of HK$1,073 million in 2007, driven primarily by heavy airframe maintenance operations in Hong Kong and engine overhaul work within Hong Kong Aero Engine Services Limited ("HAESL"). Despite relative weakness in the aviation industry, demand in general for the Group's services continued to be strong in 2008. The heavy airframe maintenance facilities in both Hong Kong and Xiamen have been at near capacity for much of the year although there were some signs of softening in the second half.
Your Directors have recommended a final dividend for 2008 of HK$2.25 per share which, together with the interim dividend of HK$0.93 per share paid on 23rd September 2008, results in a total distribution for the year of HK$3.18 per share.
Investments
The Group continues to invest in a number of projects in order to underpin long-term growth. In Hong Kong, construction of the Company's third hangar is progressing well and the opening is scheduled for the middle of 2009. Taikoo (Xiamen) Aircraft Engineering Company Limited ("TAECO") opened a new training centre in December 2008 and is expected to open its sixth hangar in the first half of 2010. HAESL is constructing an additional component repair extension which is due to open in 2010. A landing gear overhaul facility in Xiamen was opened in June 2008, and a specialist advanced composite repair facility is expected to commence operations in early 2010.

[robsy2] 10/3/2009 16:22

CR
I agree with your thinking,see previous posts,so in that sense it is probably worth a punt before the results,but, you might want to wait until you see the results so you can be more sure. Equally you could also argue that if the results are good and things are going according to plan and another contract is imminent etc then there is so much upside why take the risk now?
Just wait until next Monday.
The third way might be to keep a close eye on things this week in the lead up and look at the usual signs that good news is pending!
I won't be increasing my position because I'm stuffed to the gills with them already!
Good luck whatever you decide to do and keep us posted.

[rat attack] 10/3/2009 16:18

Bought some more @ 209.3! The only thing that concerns me about the results is whether the div is maintained - if it is cut could be some weakness irrespective of figures because that is the way of a market that doesnt reward cash expediency!

[cockneyrebel] 10/3/2009 15:52

Big placing here at 250p recently, by a related party (or shareholder in the know as it's known).

Must be worth a punt before next week's results?

CR

[robsy2] 09/3/2009 15:42

there is a list of shareholders on the AI: website, look under Investors + a recent rns tells us they have about 16+%

[pojscott] 09/3/2009 14:51

Robsy-good post but could you tell me how you know Lansdowne are long on aero inv' please.

[sambessey] 09/3/2009 10:33

THanks Robsy

[mdj8] 09/3/2009 10:29

Agree with you there Robsy

[robsy2] 09/3/2009 10:08

Here is something to cheer us up on a gloomy Monday.

Lansdowne Partners, the hedge fund, has made almost £13m from a short position in Aviva – and stands to make more if the beleaguered insurer announces a rights issue. The London-based investor has had a net short position on 0.27% of Aviva shares since 13 February. The stock has since tumbled to less than half its value and on Friday a trade could have netted the fund £12.7m, reports the Independent.

As has been mentioned here Lansdowne are an aggressive organisation that would short the life out of anything.
They are long AI, with around 20% of the capital. I don't suppose they are long for sentimental reasons. They could be long and wrong of course but they have just added to their position at 250p.This is a serious vote of confidence. They too are sitting on huge paper losses and would not have chipped in more money without having a good look and being happy with what they saw.

[mdj8] 09/3/2009 08:47

ydderF, like 1990 -2001 when we were told that the PE ratio was now meaningless? Yes at this point proper valuations have gone to the wall in the mind of the market but thats an aberration and the result of poor management strategy and the resultant true financial position of many companies (banks) being hidden - For honest companies with sound strategies the underlying value is still there and will be priced back in at some stage - when the market becomes more rational again. Keep faith - IMHO research, analysis, and identifying good management is as important as it ever was when investing, however, this time I'm sure we'll all be a little more cautious and not assume the old adage "my word is my bond" when it applies to bankers at least.

[ydderf] 08/3/2009 18:12

There's no getting away from the fact that regardless of how individual companies have traded, the only significant influence on the share price has been the general deflation in asset prices - anyone who bought five or more years ago is sitting on a substantial loss.....none of the trading trivia discussed here over the long years has made any difference.....

all the research and analysis and 'strategy', sourcing, gearing etc etc - is just piffle!

reminds me of the hours and days and months spent analyzing and guessing about the quarter point movements in interest rates.......then is a matter of days the whole ten years of effort is rendered pointless by the 'crisis'...

[robsy2] 07/3/2009 18:38

and GBP weak just above 12 month low;
£1 buys change % 52 wk-h 52 wk-l
US Dollar 1.40900 0.00030 0.02 2.03270 1.37940

Looking forward to seeing the results, week Monday, Anyone got any accurate estimates on what they will do ?
R

[robsy2] 07/3/2009 18:35

Wife is away,one kid gone out , the other locked in his bedroom with girlfriend, MUFC winning easily, pure attention seeking on my part.
Update on Libor US $ rates, very low
Date 1m 3m 6m 1yr
06 Mar 09 0.54625 1.29250 1.85375 2.15375

[robsy2] 06/3/2009 10:06

Anyone going to the presentation of the interims? I was planning to but I can't now.

[martinc] 02/3/2009 14:53

Companies do have a strong resistance to cutting dividends. They may want to keep the divi to support the shareprice in case they need to place more shares.

But it doesn't make much sense does it? Could it just be a show of strength to a potential customer to show they can and will raise money if needed?

[ydderf] 01/3/2009 13:56

every board would like to cut divis (as opposed to their salaries), at present there is no resistance at all to cutting whether nescessary or not, so imho they will CUT - why would they support a dividend yield of 10% plus? Quoted companies are no longer run for the benefit of shareholders primarily, the original concept is dead. The question remains, why issue shares to raise 10 per cent of market cap and then give it all back with a years worth of divis?

[sleveen] 19/2/2009 17:56

welcome back hywel. i think all on here share your view :-)

[hywel] 19/2/2009 17:31

Bought a few today, back in for first time in a couple of years. It may get to 200p but i'm (obviously) betting that it'll bounce from there like it did at the end of last October. Personally i don't mind if it does drop to 200p as i'll add a few more.

Medium / long term, i think they're in a good position and an obvious candidate to be bought out. Let's hope that contract negotiation with the major airline they mentioned bears fruit.

[milacs] 19/2/2009 17:20

I hold but am unhappy with the share price after the so called good deal. It has fallen from 280 to 215 in 6 trading days.

Unfortunately this is an AIM listed share with all the negative ramifications associated with AIM.

The DJI is plunging and there is no confidence in the market whatsoever and I cannot see things improving for many months.

Therefore although I hold I am afraid we will drop below 200p.

On a much longer term basis I think this one will recover. And currently it pays a good dividend.

M

[thekobbler] 19/2/2009 16:00

why? 200p seems a very strong resistence level. It's tried to go to 200p several times since the news was released, but has failed so far. I wouldn't want to be "short" of AI at the current time, as a large contract could well be the reason for the news, and these could then rebound very sharply. I bought in at 204p, what is your position, and why?

[milacs] 19/2/2009 11:56

The market seem unimpressed with the deal.

sp set to fall below 200p.

M

[rat attack] 18/2/2009 20:09

ev will be approx £330m after discounting the $80m net. Debt will be approx 2x mkt cap at same point in time.