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.

AVN Avanti Communications

Certainly looks to have been a turn
around in sentiment here.

last week was well off 100% long.

IG INDEX client sentiment rating
updated every 15 minutes and used
as a proxy for shorting. (NIL)

Client Sentiment

LONG 100% of IG clients with open positions in this market expect the price to rise

0% of IG clients with open positions in this market expect the price to fall

looks like institutional buy of £300k

I'm also on this, think theres major upside potential once the move to main markets occurs. Running a small future spread on rollover. Fingers crossed 250 suppot holds

Revenue is forecast to rocket (get it.. lol)
next year.

AVN Forecasts

Year Ending Revenue (£m) Pre-tax (£m) EPS

30-Jun-12 17.07 (8.47) (7.97)p

30-Jun-13 58.37 5.67 4.30p


as is EPS.

Very good goldfinger ...lol

Charles Stanley did some research predicting PBT £000 (3750) 2012 & 19997 2013 with positive EPS in 2013 also.

Those latest Director Buys....

Avanti Communications Group Plc
08 March 2012

Avanti Communications Group plc (AIM: AVN), the broadband satellite operator, was notified on 7th March 2012 by David Williams, Chief Executive, that he had purchased 10,000 ordinary shares in the Company at a price of 250 pence per ordinary share.

http://www.investegate.co.uk/Article.aspx?id=201203080700169252Y

Avanti Communications Group Plc
07 March 2012

Avanti Communications Group plc (AIM: AVN), the broadband satellite operator, was today by Paul Walsh, Non-executive Director, that he had purchased 20,000 ordinary shares in the Company at a price of 253 pence per ordinary share.

http://www.investegate.co.uk/Article.aspx?id=201203071622249100Y

Avanti Communications AVN.

Well the Broker SP targets are
very bullish indeed. I take it the
two larger Targets are for long term
forecasts and Investec (correction) is for short
term forecast.

Never the less 333p short term looks
impressive.

I wonder what time frame Daniel Stewart
and Jefferies have set for their targets??.

Date Broker name New Price Old price target New price target Broker change

06-Mar-12 Jefferies Buy 257.25p 1,340.00p - Reiteration
05-Dec-11 Daniel Stewart Buy 316.50p 2,525.00p - Reiteration
03-Oct-11 Investec Securities Hold 263.50p 333.00p - Reiteration

Where's Dil :-)

Booking his seat in the pub for the Rugby tomorrow!

Correction to above re- Investec....sorry.

Oi ... I might not post so much recently but I can still bloody read skinny :)

FWIW , got out and did well out of them but that was a year last November after first satellite launch and due to stop losses being hit.

GF ... without me checking I think a £25k buy by that director is peanuts compared to what he already holds so irrelevant.

Quoting broker forecasts is also irrevelant , go look at the forecasts by brokers 18 months ago !!!

I dont like the guy because of the way he tries manipulating small time private investors but so far EK has made a fortune shorting this after his mate Tom Winnifrith (wot a useless tw*t) kept tipping it .

Those two and the "Black Prince" (another mate of TW's) who made a fortune out of shorting TW's previous tips that he was up to neck in should be investigated , imo , for stock manipulation.

Regardless of fundies I wouldn't be a buyer til a break and pull back to 345-350p.



Stick yer mortgage on Wales .... 50% return 80 minutes.

DYOR blah blah blah ..... :)

Avanti contract Win
http://www.moneyam.com/action/news/showArticle?id=4334615

AVN Avanti Communications

Think some have missed this....

AVN


Avanti launched HYLAS 1 in November 2010, it will launch HYLAS 2 in July, and it recently
announced that HYLAS 3 would be launched in 2015. The valuation of Avanti’s shares depends upon
a number of things: the cost of building, launching and running these satellites; the revenues that
each satellite can deliver through sales of transmission capacity; the timing of costs and revenues; the
method and terms of financing; and finally, the value that is placed today upon future profits.
Let me review the progress of the three satellites.
HYLAS 1 was launched in November 2010 and covers Europe. The launch was a success, HYLAS 1
has been performing well and Avanti is on track to sell out the 3GHz of capacity by April 2014, defying
some critics who argued that it would not be able to compete effectively with the big incumbent
satellite operator Eutelsat.
Eutelsat’s Chief Executive believes that the European market is at least six times as large as the
current combined capacity of both itself and Avanti. Eutelsat has the advantage of greater capacity,
though Avanti’s more advanced Ka-Band technology compensates somewhat for this. While attention
has been focussed upon the delivery of broadband services to customers in remote locations, Avanti has
also been developing other markets, for instance for corporate data, as an emergency backup to existing
broadband networks, the mobile backhaul market and satellite distribution of films to cinemas.
New contracts and better contracts
The attractions of Avanti’s services have been the subject of much debate, but we now have firm
evidence. Avanti says that a full HYLAS 1 should generate approximately £50m in annual revenue
when it reaches ‘full saturation’ at the end of the third year in service (i.e. by April 2014). This is in
line with original budgets (when I first tipped Avanti in March 2008, I suggested that annual revenues
would be £34m, based on prices being achieved at the time).
Thanks to contracts already in the bag, Avanti expects to achieve sales of £17m in its first full year
of sales, to June 2012, with the possibility that this could be exceeded if other significant contracts are
signed in time.
With £23m of new contract wins announced in the last two months for HYLAS 1 and HYLAS 2, sales
momentum has been increasing and Avanti has reduced the length of time within which it expects to
achieve full capacity utilization for HYLAS 2 from five years to four. Although the original five-year
figure included some contingency, this is an expression of confidence.
With capacity of 8.3GHz, compared to the 3GHz of HYLAS 1, HYLAS 2 covers the Middle East
and North Africa although it could also be used as an overflow capacity for HYLAS 1. Its steerable
antenna is attracting attention from the military while HYLAS 2’s qualities of resilience, encryption,
security and quality are enabling it to sell on the basis of quality and technology fe atures and benefits
rather than just merely on price. Accordingly, Avanti is ‘confident that our capacity can be filled at the
expected prices’.
Avanti’s cracking deal on its next satellite
Clearly, the forthcoming July launch of HYLAS 2 carries some level of risk, but all being well Avanti
should soon have two operating satellites. A third, HYLAS 3, is now scheduled for launch in 2015.
Originally Avanti had planned to launch a third large satellite financed by bank borrowings secured
against advance sales. However, the tightening of lending criteria by the banks has made this option
increasingly unattractive and so Avanti has jumped at the chance to pursue an alternative.
At the end of 2011, however, the opportunity arose for it to launch HYLAS 3 on board a new
European Space Agency (ESA) satellite scheduled for 2015. The 4GHz capacity of this third satellite is
less than the capacity that Avanti had originally envisaged for HYLAS 3, the launch will be later, and to
secure this arrangement Avanti has had to raise £75m of cash through a share issue.
The deal is nonetheless very attractive to Avanti though. The sharing of costs with the ESA means
that for each additional GHz of capacity Avanti will pay just £18.8m on HYLAS 3, compared to £41.1m
for HYLAS 1 and £33.7m for HYLAS2. Besides that, the ESA is responsible for any cost overruns. As with HYLAS 2, HYLAS 3 will be aimed at emerging markets with a fully steerable cluster of beams that can be deployed anywhere in Africa or the Middle East.
How to price a space-age company
Assuming they all go successfully into operation, how much money might Avanti make from these three satellites?
At full capacity, which should be achieved by mid-2014, HYLAS 1 should be producing annual revenues of c.£50m. After deducting the operating and other costs, and the depreciation charge of c.£7.5m, HYLAS 1 should be generating a profit before interest and tax of c.£30m. This level of profitability is expected to stay fairly constant over HYLAS 1’s expected life of 15 years and, discounting these future cash flows at a rate of 8.5% broker Daniel Stewart calculates a value today of £310m, which is worth c.278p per share.
On the same basis, Daniel Stewart values the larger HYLAS 2 at £684m, equivalent to 612p per share and HYLAS 3 at £551m, or 493p per share. That makes a total of £13.83p per share to which Daniel Stewart adds the discounted value of Avanti’s projected 2031 cash balance of £784m – to arrive at a total of £20.17 per share.
Another calculation that we can make is of Avanti’s net asset value, a figure that simply looks at Avanti’s assets less liabilities today and ignores any future profits. At 30 September Avanti had net assets (excluding intangibles) of £195.2m, to which we can add the £75m raised in the recent share issue. Dividing the total of £270m by the 111.7m issued shares gives a number of c.242p per share, to which we can add the value of Avanti’s orbital slots. That this space real estate has a value was demonstrated last October when Brazil held an auction of orbital slots and reportedly received a bid of $88.3m for a single slot.
So the share price looks very well supported by net assets while the future profit projections are, in my view, not especially risky. Satellites are built and launched under fixed price contracts, and operating costs thereafter are low and unlikely to be subject to significant change.
So the big swing factor is revenues. There is little risk that the sky will become oversupplied with satellites and despite some fantasies about other, wireless, means of transmitting data to remote locations there is unlikely to be a genuinely competing technology at least within the 15-year life of Avanti’s satellites.
We also have some circumstantial evidence. HYLAS 2 was funded by the USA Export-Import Bank and the French agency Coface, two government bodies that are notoriously rigorous and cautious. Avanti’s directors have been regular buyers of the shares and would hardly have done so if they had any serious doubts about the business. Paul Walsh, the Chief Executive of Diageo, has joined the Avanti Board. Avanti has stated its intention of moving from AIM to the Main List of the Stock Exchange. And in October Avanti’s Chairman John Brackenbury, alluding to ‘some short-term speculators who have attacked the share price’ said:
“It is clear that Avanti owns scarce and valuable resources in one of the few lightly competed sub-sectors of the global telecoms industry which should see us create very significant value. I see great opportunity in emerging markets telecoms and our advantages in these markets are significant. I am grateful for the resolute support of our core long-term investors. Patience and confidence in the quite exceptional and unique advantages Avanti has will be rewarded. Our pipeline of new business gives us confidence in our ability to meet expectations.”

RHPS Verdict: None of these statements and actions are consistent with a business that is failing to deliver. In my view, the case for Avanti is as strong as ever. I am looking forward to the launch of HYLAS 2 in July and to this time next year when Avanti should be earning good money from two operating satellites. My share price target remains £15, so BUY UP TO 750p.

Contract win......

http://www.investegate.co.uk/Article.aspx?id=201203230700219252Z

I can't see much happening before there move to the official register, so no hurry to add to what I already have. All the same the news flow is very positive and Avanti is definatly moving in the right direction even if its sp isn't following suit.

Got a banger up its ass this morning, make that a missile.

On its way up to resistance at 287p



At this rate it should get through that easy.

just wondering if its been tipped somewhere.

From T1ps:-

Why we are buying more Avanti Communications*
31 Days ago (2012-02-24 13:33:02)
I met up with Avanti (AVN) the other day and have been pondering this for a while but our SF t1ps Smaller Companies Growth Fund has been nibbling away at the shares and here is why.

I can understand why Evil shorted it. On a current year PE of a zillion or whatever he was able to make a compelling case. It was all the more compelling given that he blinded us with science – a raft of factual inaccuracies. So I just stick to facts.

HYLAS 1 is now in orbit. Capacity is filling up gently and is now, I reckon, at c.40% (of capacity sold). It should be at 50% during this year and will be fully sold out 3 years after launch.

HYLAS 2 launches in June/July. After 3 months of testing it goes operational and is already 10% sold out. Again it will be fully sold out by September 2015.

HYLAS 3 is now fully funded to launch in a couple of years. It should thus be fully sold out by late 2017.

Avanti has fairly fixed PLC costs and so will – by my sums – be at cash breakeven within a couple of months. Thereafter as each month goes by and more capacity is sold on Hylas 1 & 2 (and eventually 3) it just generates more cash. I do not really care what EBITDA is this year to June 30th (I think it will be a tiny positive) or indeed next year or the year after (c.£30 million and c.£80 million is my private forecast). The point is what it should be by, say 2018, when HYLAS 3 is fully operational. I estimate the number then will be c£200 million (earnings per share of c130p!).

At 263p Avanti is capitalised at c£290 million. It has debt (when fully drawn) of c£200 million. So the Enterprise Value is £490 million. By 2018 the company will have chucked off a couple of hundred million pounds of free cashflow and so – were that to be used to repay debt - it would be trading on an EV/EBITDA multiple of 1.5. Now to put that in perspective, Inmarsat, which is today where Avanti will be in five years time, is on a multiple of around 8. That implies a share price in a few years of at least £15 for Avanti.

There are other ways of looking at Avanti which might lead you to expect a £20 share price. I am not sure. But what I do expect is that:

a) Over the next few months there will be a constant diet of announcements on contract wins. The key point is that we are now at inflexion point so that every new contract drops through to the bottom line.

b) We will see some excitement when HYLAS 2 launches in June. This time the directors will not feed the bears by selling shares thereafter.

c) The maths are just compelling and so I really do not give a jot what the share price is next week or next month. We currently have 3% of the growth fund in Avanti and we are increasing that holding with a stream of buys. We are happy to wait.

Brokers seem to be very positive with AVN.

Didnt realise Cenkos had a Buy rating on it.

Avanti Communications Group PLC

FORECASTS 2012 2013

Date Rec Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

Daniel Stewart
19-03-12 BUY -12.20 -10.30 6.20 5.80
Cenkos Securities
08-03-12 BUY -7.91 -7.90 3.82 0.80
Investec Securities [R]
23-11-11 HOLD -31.95 -35.92 -9.20 -10.34
Growth Equity & Co Research
05-10-11 SBUY 3.30 4.00

2012 2013
Pre-tax (£) EPS (p) DPS (p) Pre-tax (£) EPS (p) DPS (p)

Consensus -11.91 -11.55 3.25 1.60

1 Month Change 0.02 0.04 0.02 0.05
3 Month Change -6.94 -6.18 -11.34 -13.45


GROWTH
2011 (A) 2012 (E) 2013 (E)

Norm. EPS % % %
DPS % % %

INVESTMENT RATIOS
2011 (A) 2012 (E) 2013 (E)

EBITDA £-11.64m £1.11m £34.81m
EBIT £-12.45m £-7.30m £16.40m
Dividend Yield % % %
Dividend Cover x x x
PER -23.08x -23.77x 171.03x
PEG f f f
Net Asset Value PS 244.09p p p

AVN

But what I do expect is that:

a) Over the next few months therTom Winnifrith of T1ps.cpom writes: At 275p Avanti is capitalised at c£307 million. It has debt (when fully drawn) of c£200 million. So the Enterprise Value is £507 million. By 2018 the company will have chucked off a couple of hundred million pounds of free cashflow and so – were that to be used to repay debt - it would be trading on an EV/EBITDA multiple of 1.5. Now to put that in perspective, Inmarsat, which is today where Avanti will be in five years time, is on a multiple of around 8. That implies a share price in a few years of at least £15 for Avanti.

There are other ways of looking at Avanti which might lead you to expect a £20 share price. I am not suree will be a constant diet of announcements on contract wins. The key point is that we are now at inflexion point so that every new contract drops through to the bottom line.

b) We will see some excitement when HYLAS 2 launches in June. This time the directors will not feed the bears by selling shares thereafter.

c) The maths are just compelling. I really do not give a jot what the share price is next week or next month. We currently have 3% of the growth fund in Avanti and we are increasing that holding with a stream of buys. We are happy to wait.



Zak writes: It would appear that while the technicals of Avanti in recent weeks have been pointing to the shares hammering out a floor, the end of what has been a relatively cruel pullback for the stock remains a difficult one to call / trade. What helps at the moment is that in addition to the tentative rebound off a falling August support line, there is also clear bullish divergence in the RSI window. On this basis one would suggest that while there is no end of day close back below 240p we can finally look for an initial test of former early December support at 280p.