goldfinger
- 12 Jan 2010 20:42
goldfinger
- 24 Mar 2011 07:51
- 1147 of 3532
In fact Winnies take here on AVN.
Here's Tom Winifriths latest thoughts on Avanti....
Over the past couple of weeks the market valuation of Avanti Communication - a stock which we still believe to be worth 20 - has taken a material knock following some derisory commentary from some well known Shorters. Without doubt the persons in question have made a number of good calls in the past but this truly is a blunder. His argument (supplied by what we reckon is the Analyst who recently put out a Sell recommendation on the stock) is based upon numerous factual errors and poorly researched content. Mr Knievil also appears to have a few problems with decimal points.It has been posted around on a number of Bulletin Boards and has meant that the company's market cap has tumbled from roughly 514.2 million, to 405 million in a matter of days.
We however read the above's comments with amazement and the fact that we actually do our own research meant we were happy to take advantage of the opportunity that was given to us and added to our holdings. We were not the only ones. On 23 February 2011 in accordance with listed companies's continuing obligations it was announced that the company Chairman and CEO had between them hovered up 150,000 worth of shares at a price of roughly 550p. On 25th February directors moved in again with six figure purchases.
The bear argument was based around the fact that Avanti will missed its earnings forecasts and will not be able to compete with the what the above believed to be greater capacity offered by a competitor, EUTELSAT. It seems the Analyst behind this poorly constructed argument got his decimal point in the wrong place stating the EUT's capacity was 23 times that of Avanti's instead of actually roughly 2.3 times taking into account both HYLAS 1 and 2 (the above failed to recognised this). Regardless of this however more is not always better in regards to broadband capacity, and a comparable example in the US shows that Avanti's increased flexibility of application and broader coverage will materially pay off in the long run. Raw capacity lost out to product innovation in the US when Hughes Communications was sold for a markedly higher price than that of its competitor Wild Blue. In actual fact Wild Blue's product offering is pretty similar to that of EUT.
It is however disappointing that poorly constructed arguments can have such an influence on market valuations. This however is an example of the short term and volatile aspects of investment, and is exactly why we do not focus on the short term price movements of our portfolio. What we do is identify value, buy at sensible prices and then hold. As we have said numerous times before on a very simple DCF basis we reckon that Avanti is worth 20 per share. We are not alone in this belief and although we pay little attention to outside analyst coverage all bar one of the current notes rate Avanti as a strong buy operating within in a rapidly developing sector. Interims for the 6 months ended 31 December 2010 were not indicative of the company's progression but they did report that the current order book stands at 229 million and that currently the pipeline of HYLAS 1 and 2 transactions is valued at 389 million.
Increasingly once Avanti moves into full commercial service operations, which is expected shortly, we are expecting an influx of more news detailing further big name sign ups to the service. The company is operating within a niche market with extremely high barriers to entry and limited price competitiveness and has already won serious institutional backing. We expect that demand for the company's service will be consistently increased due to the flexible applications of the product offering which differentiates the company from its competitors. It is admittedly disappointing that such poorly backed arguments can have this sort of impact on the share price, but what we do believe is that the value here will even
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goldfinger
- 24 Mar 2011 07:51
- 1148 of 3532
It seems the Analyst behind this poorly constructed argument got his decimal point in the wrong place stating the EUT's capacity was 23 times that of Avanti's instead of actually roughly 2.3 times
goldfinger
- 24 Mar 2011 08:09
- 1149 of 3532
MKS blasting out the blocks again ..NICE.
goldfinger
- 24 Mar 2011 08:55
- 1150 of 3532
goldfinger
- 24 Mar 2011 09:25
- 1151 of 3532
A pal on twitter says, watch out for bad retail sales figures coming in at 9.30 am.
Wonder if hes right?.
goldfinger
- 24 Mar 2011 09:33
- 1152 of 3532
Well not that bad, but he was right.......
UK Retail Sales (Feb) M/M Actual: -0.8% Survey: -0.6% Prior: 1.9% UK Retail Sales (Feb) Y/Y Actual: 1.3% Survey: 2.3% Prior: 5.3%
ply
goldfinger
- 24 Mar 2011 09:50
- 1153 of 3532
Opened a long in SIA SOCO, gap on chart to 430p and needs filling. Fundies look pretty solid. No extra tax here.
Sp moved above its 200 day MA aswell bullish.
goldfinger
- 24 Mar 2011 10:56
- 1155 of 3532
Citi group with a target SP of 441p.
Citigroup starts Soco International PLC with buy rating; price target
of 441P
Seymour Clearly
- 24 Mar 2011 13:25
- 1156 of 3532
Have joined you on SIA GF, looks good.
goldfinger
- 24 Mar 2011 16:19
- 1157 of 3532
Good to have you on board SC.
splat
- 24 Mar 2011 19:51
- 1158 of 3532
yes, I like the look of that too GF, will be with you tomorrow
goldfinger
- 25 Mar 2011 08:07
- 1159 of 3532
SIA off too a positive start.
goldfinger
- 25 Mar 2011 08:40
- 1161 of 3532
AVN going like the clappers at the moment. NICE. Some big buys this morning.
goldfinger
- 25 Mar 2011 08:45
- 1162 of 3532
Seymour Clearly
- 25 Mar 2011 09:10
- 1163 of 3532
Morning GF, have been in ARM for a couple of weeks now from 523, was a bit premature, but hey - worth a punt imho :-)
goldfinger
- 25 Mar 2011 11:34
- 1164 of 3532
Yep markets rather dull in the FTSE 250s . Some say small miners and oileys recovering today.
looking through the system and a lot of stocks falling into horizontal trading ranges. Might be the pattern for the spring/summer now.
Mind can be highly profitable catching tops and bottoms MKS is just an example.
goldfinger
- 25 Mar 2011 15:49
- 1165 of 3532
Hope investors havent forgotten the bullish broker SP targets on this stock from christmas...
Date Broker name New Price Old price target New price target Broker change
25-Feb-11 Bank of America Neutral 608.00p 238.00p 660.00p Upgrade
18-Feb-11 Morgan Stanley Overweight 620.00p - - Reiteration
14-Feb-11 Goldman Sachs Buy 651.00p 700.00p 800.00p Reiteration
goldfinger
- 27 Mar 2011 05:02
- 1166 of 3532
Went long on Sage SGE late friday. System gave it out as a Buy and was the only one in the last 2 days .................. amazing given that we have had 2 days of ups, but then again the ups have been small percentages.
Looks like we are entering a spring/ summer horizontal market.
Trading ranges though can be very profitable.