Buy Advent Air* at 12.75p
Says Luke Heron of WatsHot.com
(Advent Air is one of three picks for 2007 on WatsHot.com, to read the others, click here)

Advent Air consists of two principal operations. Firstly is the provision of services on long term contracts to mining companies in Western Australia. This gives superb visibility of earnings. The second part of the operation is flying local services to and from Perth and Darwin to various smaller towns in west and North Australia and also up to Bali. The point about this operation is that these routes would not sustain intense competition - if you want to get to these places then you really have to use Skywest. On around 60% of these routes Skywest has a monopoly.

The company has already announced an expanded charter contract with Argyle Diamonds, a subsidiary of Rio Tinto, which will contribute an additional AUS$5 million in annual revenues to the group. A further air charter deal with BHP Billiton followed shortly afterwards, adding AUD $2m to revenues in a 2-year deal.

The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. Watshot.com is owned by t1ps.com which is authorised and regulated by the FSA and can be contacted at 3rd Floor, Henry Thomas House, 5 - 11 Worship Street, London EC2A 2BH.

Skywest owns outright a fleet of 7 planes and has a further three operating under lease. Although it depreciates its planes over 6 years they have a useful life of 20-25 years. The company estimates that its fleet in operation today has another 12-15 years in it. Advent has cash of over 8 million pounds as of its last year end, worth 4p per share. The company should comfortably deliver earnings of 1.2p climbing to 1.5p for the year to 30th June 2008. I can see Advent being taken over at some point, but that is not a reason to buy. Advent pays a dividend, has contracts that underpin earnings and is growing at a good level. At 12.75p, "buy".

* Advent Air is a corporate client of Bishopsgate Communications and of GE&CR, which are owned by Rivington Street Holdings, the owner of this website.

Key Data:

Price: 12.5 - 13p
Market - AIM
EPIC - AAIR

Profit - If I'm reading correctly - is around 1 million. And given a 70million mrkt cap I am not suprised that the shares have crawled a measly 3% higher hyleo.

mid price 13.5p today. zzzzz