This is a BUY tip from Tom Winnifrith...

Sorry if this is rather boring as the market cap is now c 350 million but at 470p Avanti Communications (AVN) - a stock held in the SF t1ps Growth Fund - is really very cheap whichever way you look at it. It is now funded to launch 3 satellites into space ( and fully insured if the worst happens which will only delay the programme by 6 months anyway). You value Avanti by discounting back the net cashflows these satellites will generate. That depends on how much capacity is sold and at what price. Use a model based on very conservative assumptions and this stock is worth 13 ( the lowest valuation in the market). But that model uses assumptions about sales prices which are already being beaten by forward sales Avanti is booking today. Use those prices and you head up to the 22.50 value of house broker Cenkos. My own view is that Avanti will do better still and this stock could therefore be worth 25. Exc itement will mount as the first satellite is launched later this year. Remember those valuations are the Net Present Value of future cashflows ( i.e. what they are worth today). If you can buy at under 600p ( as you can now) you should do so and sit back and wait. I suspect after HYLAS 1 is launched you will never again be able to buy at less than 600p.

I just put some money in my pocket and got my kicks for free...this went down to 4-10 on the mornings fantastic RNS...a bright light on a dark day...the MMs have chalked some mad prices in their time...this ranks with the very best of the boopers... like shopping at Harrods and paying Aldi prices...

16 March 2011

Avanti Communications Group plc

("the Company")

Directors Shareholdings

Avanti Communications Group plc (AIM: AVN), the broadband satellite operator, was informed last night, 15 March 2011, by David Williams, Chief Executive, that he had purchased 11,895 ordinary shares in the Company at a price of 416 pence per ordinary share. David Williams now holds a total direct and indirect voting right interest in 1,536,967 ordinary shares in the Company, being approximately 1.9% of the issued ordinary share capital of the Company. Mr Williams has a further revocable and indirect interest in 522,233 ordinary shares under the Company's Long Term Incentive Plan which are subject to certain criteria.

--ENDS---

what a very strange stock ..... i got in and out this morning, selling at 475.75 .... the odd thing is that, even on L2, there were no bids showing higher that about 467.5 at the time

Just gone long. Talk of Evil K ditching his short on clarification of charging policy.....

as per broker note below just out.


http://www.equitydevelopment.com/downloader/816

Buyers coming in now on the back of the broker note.

Broker coverage from hemscott premium

Avanti Communications Group PLC

FORECASTS WIRES 2011 2012
Date Rec Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Daniel Stewart
21-03-11 BUY -12.60 -12.50 3.30 3.70
Investec Securities
16-03-11 SELL -13.64 -15.60 -31.95 -35.92
Cenkos Securities
15-03-11 BUY -12.70 6.80 8.00
Eden Group
04-03-11 BUY
Growth Equity & Co Research
02-02-11 SBUY -12.70 -15.75 3.30 3.35
Equity Development
10-01-11 None -12.60 -15.10 6.30 7.50

2011 2012
Pre-tax () EPS (p) DPS (p) Pre-tax () EPS (p) DPS (p)

Consensus -12.87 -14.66 -3.40 -3.75
1 Month Change -0.22 -0.33 -8.26 -9.31
3 Month Change -8.03 -18.46 -8.72 -10.02


GROWTH
2010 (A) 2011 (E) 2012 (E)
Norm. EPS % % %
DPS % % %

INVESTMENT RATIOS
2010 (A) 2011 (E) 2012 (E)

EBITDA -1.65m -8.38m 9.93m
EBIT -2.42m m m
Dividend Yield 0.00% % %
Dividend Cover x x x
PER -124.31x -30.62x -119.67x
PEG f f f
Net Asset Value PS 216.93p p p

not much biz at all in this stock, let alone buying .... however, when it moves it often does so in a rush

Yep noticed that myself, and U can bet your bottom dollar winnie is writing out a note now with the broker note attached showing how is side kick Evil is wrong. I think of everything cyners LOL. (winnies fund is long and as been buying on the fall)

thought about buying these (again) but decided too greedy on margin as i am pretty much as fully invested as i would like at the moment ..... bought a few more BLNX however

Yes looked at them this weekend.

Tabby does Tom Winnifrith ever invest any of his own money in "his" portfolio as he never used to ?

And call me cynical but didn't EK write for T!ps ..... hmmmmmmmm !!!!

Winnifrith (imo) don't know his arse from his elbow and his "tips"(again imo) that his mates are involved with (wasn't Colin (Blackbourne?) his best mate when he was ramping MMD) should be treated with extreme caution.

He does these days Dil, yes.

Told you cyners...........

Here's Tom Winnifriths 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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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

Dil...all your assumptions are of course perfectly true...EK does have a lot of clout and influence...another little piece of evidence how short selling is extremely harmful to many good companies and investors... whilst rewarding the cunning villain!...
Dil...I have traded a few times with AVN but I am still a good few quid down...these shares are now locked away to avoid temptation...
EK based a lot of his play on information from an informant...here are some answer from a respected guy....

Your informants information on Hotbird 6 is seriously flawed. He may know less about Hotbird 6 than you think, very few customers of Tooway are currently being served by Ka Band, which is causing an issue for Eutelsat in the change over from Ku to Ka, as your informant will know these customers have to now duplicate their costs incurred in making the switch. This is not in anyway being subsidised by Eutelsat, which of course is causing issues for customers, but I am sure your informant knows this.

I have no issues with anyone short, best of luck to you. As I said earlier, the issue here is not whether Avanti can charge premium prices, it is whether at those prices it can fill its satellites. I am confident it will, but the coming weeks will determine this issue.

To be fair to him and his analyst friend, the points raised were valid, if you did not understand the Market . In my humble opinion, the analysis SC is relying on is fundamentally flawed in the following ways:

1) the " premium" pricing Avanti are charging. It is easy to compare a package offering a 4gb per month download allowance with Avanti's package with unlimited download and say Avanti are more expensive. But it is also quite stupid, different value proposition, there will be those that find 4gb enough so will choose Tooway, others will choose Avanti.

2) Market size is the dominant factor here, Michel de Rosen has stated continuously that Market demand far exceeds current capacity and is likely to
beyond 2020, continually stating that as the mobile, home entertainment and computing markets converge, so greater pressure is applied to existing resources.
The basic theory of supply and demand states that where supply exceeds demand,
prices fall to find an equilibrium, when demand exceeds supply, prices rise to
find an equilibrium. Competitive pricing is not necessary in this Market and is
destructive to all companies, and leads to value erosion and wealth taking.

3) SC'S analyst stated that currently Eutelsat is providing ka band to it's UK
customers through hotbird6. Maybe this analyst should have spoken to Eutelsat
(Tobias Martinez is decent and an ex alumni) regarding the services offered by Hotbird 6. Here is a link which might help
http://www.lyngsat.com/hb6.html

All in all, the analyst that SC Is depending on changed from being very technical to pointing out a flaw being Ku instead of Ka on a table in the Cenkos note. Never a good sign to be picking up on such hugely minor points.

Dil...Avanti offer rural broadband which at worst is comparative... military.. and contracts with Hughes largest provider of enterprise services in the World... Avanti offer a price plan with no limit on data used. Eutelstat adjust their pricing based on data used. I think this could take time against EK...but add all the valuations up...the average still looks very tasty!!! true value will return...

Excelent post tobasco. Helps very much with the technical points.

Cheers gf was not aware that Tom now bought shares as well as tipping them and I agree thats an excellent post by tabby and I still believe these will prove to be a winner. A move to the main market would help.

Moving up nicely today, some big buys........... or are they shorters getting out?.