Updates

Avation

June 2014

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

As we anticipated in January, Avation, the lessor of commercial aircraft to airlines, has been approved to become a Singapore tax payer reducing its tax charge to 10% from mid April. Meanwhile, Avations addition to its fleet continues apace with Avation expected to add a further two ATR aircraft in FY14, seven in FY15 and five in FY16. The fleet size is expected to be 38 aircraft by the end of that year. Scale is important as it drives down the cost of debt. The growth supports Cenkos eps forecast of 16.7p this year to end June, with 21.8p and 30p over the next two, which would drop the PE to a derisory 3.6. Looks cheap -something has to give; keep holding. ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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