Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

Advent Air-the Chairman only appears to think the shares are worth 14.5p

Growth Equities & Companies research (via UK Analyst) issued a very bullish note on Advent Air this morning highlighting the groups significant contract win with Rio Tinto in respect of a charter contract which will 'significantly enhance revenues and the visibility of forward earnings'.

The note waxed lyrical about Advent's 'dominant position within the resources sector' and emphasised how the group's growing fleet would 'enable it to service an increasing number of similar contracts'. It went on to state how the shares trade on a prospective enterprise value to earnings multiple of just 6.4 and yield 3.4% concluding with a 21p target price as a conservative initial objective.

Advent Air the owner of Skywest, the Australian charter airline has looked an interesting story in 2006, however, the Executive Chairman's share trading antics back in August would put anyone off. Having acquired 10 million shares in the company on 24th August 2006 at a price of 11.22p/share Mr Chatfield conveniently sold 9 million shares at 14.5p/share 7 days later at a price of 14.5p/share pocketing just under AUS$300,000 in the process.

Antics like this will hardly endear him to fellow or indeed potential shareholders, notwithstanding the stellar performance of the group or the encouraging contract wins. It simply begs the question- what next?

On the one hand we have a research note telling us how the shares are worth 21p but on the other we have the Chief Exec selling out at 14.5p and making a nice quick turn. The Chief Exec appears to be of the view that there is little value in the business beyond 14.5p/share.

I just wonder why the Growth Equities & Companies Research failed to mention Mr Chatfields share dealings in their note. Perhaps it's because the note was commissioned by Advent Air itself!

Of greater concern is that there are people who will have invested on the basis of this piece of biased nonsense.


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