I once believed in Avanti Communications (AVN). I also used to believe in the tooth fairy, Santa Claus and the idea that West Ham might one day win something again. How naïve. A while back I became a mild sceptic. I am now convinced that this is a colossal accident waiting to happen and should be shorted aggressively. It is my top AIM short to pay for Christmas.
I am amazed at the way that the fundamentalists are divided on this company. The bulls (lead naturally by the house broker) reckon that in the long run the shares are worth north of £10. The bears (led by Matthew Earl) seem to think that fair value is rather closer to 0p. That gives we sad chartists our opportunity.
In a piece last week (see HERE) on AIM-listed satellite operator Avanti Communications (AVN) – in which I own some shares as a speculative investment – I noted that if the company is able to fill capacity on its satellites as planned discounted cash flow valuations suggested a multiple of the prevailing share price but that its trajectory as a still emerging company was unlikely to be smooth from here. This followed some commentary on the company which had strongly focused on the lack of an Interim Management Statement in May as there was one in May 2012 – though the company had since updated that a year-end trading statement would be forthcoming. This has now been published…
Bear raider Evil Knievil ( Simon Cawkwell) has been short of Avanti Communications (AVN) a good while and after today’s profits warning he says that he remains short, telling me that “Avanti is simply not investment grade material.” Cawkwell says that Avanti may turn the corner but equally it could disappear altogether. He says that he has no intention of closing his short.
Firstly a declaration that I own some shares in this AIM-listed satellite operator as a speculative investment. Shares in Avanti Communications (AVN) performed very strongly in 2009 and 2010 – reaching 735p in December of the latter year. However, they have since disappointed and currently trade at 250p, capitalising the company at just under £280 million.
DJ Zak Mir takes a technical look at the latest "hit" from the satellite communications group.
I welcome the damascene conversion of Tom Winnifrith to the bear case for Avanti Communications (AVN). It has never satisfied me as to its interesting accounting policies and I remain short. And I feel more encouraged by the lack of an Interim Management Statement.
I first recommended shares in Avanti Communications (AVN) back at 116p years ago. I was still bullish all the way up to c800p when it launched its first HYLAS satellite since when the shares have headed only one way. They now trade at 279p .I apologise for not selling a long time ago.
One of the better rules both in the market and as far as life in general is concerned, is that if something takes too long, you should smell a rat.
Satellite operator Avanti Communications is one of those companies that clearly divides traders and investors right down the middle.
To say the least there has been something of a two way pull on the fundamental side as far as Avanti Communication is concerned over the past year, with fans of the satellite broadband providing regarding it as go – go tech stock winner, while its all its detractors point to widened losses for the half year, lowered broker revenue forecasts and cash burn issues.
Bear raiders Lucian Miers and Evil Knievil are meeting for lunch today. I know, as I was invited but my liver is not up to it. However the main course should be humble pie. The bears predicted that Avanti would miss its targets at the interim stage. Moreover the results demonstrate very clearly that it is already more than two thirds of the way to hitting 2014 (not a misprint) numbers and that it continues to win business. The shares are a buy at 265p and could move sharply as the bears are squeezed. I sense that margin calls could well be served up at Evil towers today in time for pudding.
Shares in AIM listed satellite operator Avanti Communications (AVN) have slumped today by 62.75p to 286p after results for the year to June 30th 2012 were announced and were received poorly. Adding to Avanti’s misery bear raider Evil Knievil announced that he had gone short at 295p. He is wrong and this is a buying opportunity. I say this as someone who tipped the shares first at 116p in August 2004 and who has continually rated them as a buy at anything up to an all time high of almost £8. I still believe that the shares will in due course move sharply higher and my target price is £16.81. Here is why.
