Home » VectorVest » Reiterate Buy Avation (AVAP) says VectorVest. Strong rising trend supported by steady growth in revenues and pursuit of growth

Reiterate Buy Avation (AVAP) says VectorVest. Strong rising trend supported by steady growth in revenues and pursuit of growth

Singapore-based Avation PLC, (AVAP.L) is a specialist commercial passenger aircraft leasing company managing a fleet of aircraft which it leases to airlines across the world. AVAP customers include Flybe, Virgin Australia, Thomas Cook, Condor, Air France, Air Berlin, Air India, Vietjet Air, Fiji Airways and Mandarin Airlines. Avation also has a subsidiary that supplies aircraft parts and spares to a range of operators, internationally.

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On Friday 30 June, 2017, AVAP said its leasing business was operating in line with expectations. For the year ended 30 June 2017 management estimates revenues will be $94m (unaudited) with a margin for error of 0.5%, and estimates leasing revenues have grown approx 32% year on year. In order to recognise shareholder ownership as it continues the development of the business, an interim dividend of 6.00 US cents per share has been approved for the year ended 30 June 2017, an increase of 85%. Executive Chairman Jeff Chatfield, said: “Avation is both diversifying its aircraft fleet and also pursuing growth and is currently assessing additional aircraft acquisitions.”avap_logo

Following our article of Nov 23rd 2016, AVAP has once again flagged across key VectorVest metrics following the trading update outlined above. The Relative Timing (RT) trigger, which flagged AVAP in the Nov 2016 article once again rates the stock at 1.45, which is excellent on a scale of 0.00 to 2.00. Since our last article, shares have since hit and passed our then target of 226p, but despite this, the VST-Vector (VST) master indicator for ranking every stock in the VectorVest database logs a VST rating of 1.22 for AVAP, which is still good on a scale of 0.00 to 2.00. The VST is computed from the square root of a weighted sum of the squares of Relative Value (RV), Relative Safety (RS), and Relative Timing (RT).

The chart of AVAP is shown below with the original call last November marked. The share has recently broken out of an ascending triangle pattern and is on a BUY recommendation on VectorVest. Of note is the last reaction low charted on the 3rdAugust 2017. This low is higher than the last major high (as defined by the highs of the ascending triangle. This expansion indicates that a strong trend is in process. Classical charting techniques indicate a target for AVAP.L in excess of 300.


Summary: Trading now at 246p, AVAP shares have both hit and passed our Nov 2016 target of 226p. Supported by the exceptionally strong charting configuration, steady growth in revenues and stated pursuit of growth, VectorVest continues to view AVAP as a solid investment opportunity. As such we reiterate our buy rating, and raise the target price to the current VectorVest valuation of 280p.

Dr David Paul

August 9 2017

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European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.com

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