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.

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
--------------------------------------------------------------------------------

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?.

whooping is premature and great care needs to be taken with this stock as trading is pathetically thin as always ...... currently just 55,000 traded

Expect this to fly today!!... 389m to 427m backlog in 2 months!


RNS Number : 0594F

Avanti Communications Group Plc

18 April 2011

Date: 18 April 2011

On behalf of: Avanti Communications Group plc ("Avanti" or "the Company")

Embargoed until: 0700hrs

Avanti Communications Group plc

-- Litigation Award and Trading Update

Avanti Communications Group plc (LSE: AVN), the satellite operator announces a Litigation Award and makes a Trading Update.

Litigation Award

Avanti Communications Group plc (LSE: AVN), the satellite operator, announces that it has been successful in its claim against Space Exploration Technologies Corporation ruled upon under binding arbitration by the American Arbitration Association in New York. Avanti was awarded the full amount of refund it claimed under the contract, being $7,566,013 and was also awarded interest from the date of the claim.

Trading Update

Full Commercial Service on HYLAS 1 successfully commenced on April 4th. The process of migrating the base of approximately 5,000 Avanti end users currently using leased Ku band capacity onto HYLAS 1 has proceeded to plan, with 10% already migrated.

Several of our Service Providers also have similar bases of end user customers who are currently using interim leased Ku band capacity. Avanti is also assisting these service providers in the migration of their end users to HYLAS 1, which amounts in aggregate to over 20,000 end users.

Finally, we confirmed that successful service launch has met contractual service parameters with all of our customers, confirmed their requirements for modem deliveries from the supplier and updated bandwidth demand.

Based on these results, it is an appropriate time to update the market on sales progress. In 2010, Avanti specified that it was confident of exceeding a target for pre-sales signed by service launch of 25%. This target metric was useful in demonstrating confidence in the ability to pre-sell meaningful amounts of capacity before launch.

Avanti is pleased to confirm that at service launch, having confirmed contracts and orders, the peak utilisation rate under HYLAS 1 aggregate contracts is 35.1% which comfortably exceeding the 25% target set pre-launch. Henceforth, Avanti will regularly report the industry standard backlog metric.

The backlog statistics are now GBP139.0m for HYLAS 1, GBP28.4m for HYLAS 2. Avanti also notes a GBP113.4m option for HYLAS 2 capacity which is subject to a significant option fee.

Approximately 52% of backlog revenues relates to Enterprise and Military applications and customers (not including the HYLAS 2 option), with the balance relating to SME and Consumer broadband. Avanti expects backhaul business to soon become a significant percentage of backlog.

Avanti is also pleased to report that the increased credibility generated from successful service launch has resulted in an increase to the pipeline. The pipeline now stands at GBP427.2m.

--ENDS--

assuredly premature to start even chilling the champagne, but at least sp has broken back above 25 dma