@Investment4Adam@IChronicle His Alpha picks have been great over the last 2 years as well and that was pretty much the only reason ppl paid the premium. I am not sure how much he got paid at IC, I always thought he could make much more if he started his own substack. Who knows maybe..
Simon Thompson at IC is retiring, I wasn't expecting that. I learnt a lot about investing in small caps from reading his books and articles. He didn't get them all right but had a good hit rate. Big loss for IC imo, I didn't really follow anyone else so cancelled my subscription this morning. Wish ST all the best.
The reward here is too good to let go. I spent a lot time flipping stocks in months and did reasonably well. As the portfolio I grew I realised I needed to do something different. Finding bargains (with growth prospects) or special situations and building a larger position is the way for me now. I am cerain this will pay off and maybe a bit arrogant about it.
#AVAP From over 74m shares c18 months ago to sub 60m shares, over 16m shares bought back in the period at a c50% discount to NAV. Over $30m spent doing so for a $100m market cap. More of this please.
@Investment4Adam@RonadatylJake@IChronicle I used to read his articles online, the print edition is usually recycled without even opening for me.
That's been the case for the last 5 years at least so never cared if it was a Friday or Monday delivery.
@Investment4Adam I agree, he lost the plot with his last 2-3 bargain share portfolios but overall track record remains impressive. I am not sure if there any other analysts worth following at IC. Huge loss for them.
#AVAP just came across this podcast with @AVATION_PLC IR director Tim Bacchus recorded last month. It should have been posted on the Company's X account. Interesting listen.
https://t.co/Etjz1qnvTp
The fact that money is going into buying back shares cheaply rather than new planes in the secondary market tells me only one thing. The end game is to only sell, it may take a couple of years but there is no other way he cashes out. Maybe he has a figure in mind (above current NAV) and he is now pushing to get there.
#AVAP Now bought over 1.2m (2%) shares in 4 months, roughly 300k a month on average which have added 3p per share to NAV.
ATR late again, so unlikely they will meet their own target of 38 deliveries this year. Aluminium shortage + supply chain delays + input cost rise will only make matters worse on the supply side whereas demand will continue to rise for fuel efficient aircraft. I can see price rises which could be hugely beneficial for a lessor with 14 ATR 72-600s in fleet +14 on order +19 purchase rights.
Fleet value + Option value increase over lower share count is what I like.
If the gulf states don’t get to supply oil and gas to their customers in Asia soon the long term damage for their market will be huge as policy efforts to move away from Oil and gas will be material. Just look at what China already did others will follow. 1/x
It seems like the war is over (almost) but the supply chains will remain messed up for a very long time. Who remembers what happened to supply chains post covid? Even 50% of that level impact will be significant. Expect more price rises across all real assets.
Some #AVAP related thoughts
- Air Baltic is one to keep an eye on, they have been bailed out again (for the short term) with a €30 loan approved by the Latvian govt yesterday. Exposure with 4 A220s (5 previously with an insurance settlement on one written off). No really a concern in any case as this aircraft type is very much in demand.
- Every single analysis points to a further increase in demand for ATRs (both new and in the secondary market), c40% for fuel efficient per seat vs regional jets. Empirical evidence (in peak oil price times) supports an increase in demand and market value for ATRs (last 2022/23)
-Cirium last values each ATR option at $23m per aircraft. They have 14 in fleet, 14 on order and 19 options. The lessor with the largest ATR order book. I expect increase in lease rates.
-ATR purchase option value will increase if bond yields remain at the current level (or US 5Y being higher than 3.7%) at year end (June 30) so positive impact on NAV
-Warrants (including AVAW (c4.7m outstanding) are not so much in the money. A cashless exercise at the current share price would only result in c850k shares issued. In any case they expire Oct 26 so have to be exercised before. Employee warrants (strike price 126p, c600k in total expire within 2 weeks so not so much in the money either) which is actually good for long term holders.
-Management continue with moderate buybacks, $1m bond also in treasury, continuing with capital management as well as allocating capital for purchase on new ATRs. One due anytime (on lease to Air Cambodia) plus 4 more due by June 27. Each ATR on delivery will add c$1.4m to NAV (variance between option value recognised vs market value as evident with the Dec-25 delivery).
Sp 134p vs last reported NAV (274p). They have bought over 1m shares since HY at 50% discount. Doing all the right things. Any increase in ATR value (new + secondary) can offer a significant upside to NAV (inevitable). Patience...
If you like me sometimes invest significantly more than 10%of your portfolio in a single company than your CAGR is meaningless to compare with of a fund manager. Same with investing in small caps. The advantage private investors got is that we don't got a lot constraints. 1/x
#AVAP leased their first ever ATR to them 3 months ago. Now they have ordered another 4 directly with 4 purchase rights.
ATRs in demand..#AVAP due to be delivered 4 more by December this year.
Preserving cash now to buy back some bonds cheaply (if the market allows) would be wise.
[🔵Press release] Korea’s newest regional airline orders up to 8 ATR 72-600s
SUM Air orders 4 ATR 72‑600s and 4 purchase rights, confirming the ATR as the aircraft of choice for sustainable regional connectivity across the region.
Signed in Seoul 🇰🇷 ; it is a strong signal for the future of regional aviation in Asia.
Read more here: https://t.co/Xw4oMIxGaf
#ATR #RegionalMobility
#AVAP has one plane leased to Etihad, that's their total direct exposure to the Middle East and I consider the default risk on that airline to be 0 (state backed, Arabs won't ever let it go bust).
No direct risk on any of the other planes/airlines. Some European/Asian airlines will actually be net beneficiaries and take more market share from the Middle Eastern giants (Emirates/Etihad/Qatar).
ATR - the current oil price would do more to increase demand for regional fuel-efficient planes and I see no issues in the demand for these planes. Supply would still be an issue (maybe bigger) as supply chains get affected, would only increase secondary market prices.
£300m bonds are deferred till 2031. In hindsight what great timing to do it last year.
Overall, great opportunity for management to mop up more shares which I am sure they will and I think they are acting very strategically to mop them up lower (why not) as there would be many panic sellers in the current market.
I talk my own book. DYOR.