Stockranks Upgrades & Downgrades 25 November: TRCS; AVAP; AO.

Tuesday, Nov 25 2014 by
Stockranks Upgrades amp Downgrades 25 November TRCS AVAP AO

Avation and Tracsis have been climbing the StockRanks over the last few days, whereas AO World has been on the decline. Lets explore these in further detail.



The aircraft leasing company, Avation, is expected to grow earnings by 43% in 2015 and another 26% in 2016. Brokers expect this growth to be driven in part by plans to expand the company's aircraft fleet over the next 15 months. The fleet currently has 26 aircraft. This is set to grow by almost 40% to 36 planes. The market seems to be getting excited about this news. Avation has beaten the 'footsie' by 10% over the last month and 30% over the last year.

However, the company still looks cheap, with a P/E ratio of just 12 and an overall ValueRank of 69 - within the cheapest tercile (33%) of the market. Perhaps investors are frightened by the company's volatile earnings. Earnings per share dropped by 33% in 2010, before rising by 89% in 2011, falling 12% in 2012 and then rising again by 43% 2013. Investors may also be weary because the expansion of Avation is set to be funded by debt.

It is also worth pointing out that the company has a high 'Bankruptcy Risk' according to the
Altman Z-Score, although Avation does have a good Piotroski F-Score, indicating that the firm is improving its capacity to service long-term debt. The company's StockRank has just creeped into the top quintile of the market. Last week it was 79, but it now stands at 82.



Tracsis produces a strong ROCE (22%) and appears to have an economic moat. Their software helps train operating companies optimise the use of crews across networks and is used by most of the UK's train operating companies. Customers have a tendency to renew each year, suggesting that Tracsis could have high switching costs.

Tracsis has rocketed by 14% since the company released annual results on 12 November. The transport consultancy reported that earnings had grown by 37%…

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AO World Plc is an online retailer of electrical products. The Company operates through two segments: online retailing of domestic appliances to customers in the UK, and online retailing of domestic appliances to customers in Europe (excluding the United Kingdom). The Company offers over 5,500 stock keeping units (SKUs) in the United Kingdom, approximately 2,000 in Germany and over 600 in the Netherlands. The Company offers a range of ancillary services, such as customer finance options, an unpack and recycle service, product care packs, and disposal and connection services. In the United Kingdom, the Company operates in approximately three categories: Major Domestic Appliances (MDA), Small Domestic Appliances (SDA) and Audio Visual (AV). The MDA market offers built-in appliances, such as dishwashers. The SDA market comprises small appliances, food preparation and floor care. The AV market includes television, audio, set-top boxes, digital versatile disc (DVD) and Blu-Ray players. more »

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Tracsis plc is a holding company. The Company is engaged in the business of software development and consultancy for the rail industry. Its segments include Rail Technology and Services, and Traffic & Data Services. The Rail Technology and Services segment includes its Software, Consultancy and Remote Condition Monitoring Technology, and also includes Ontrac Limited and Ontrac Technology Limited (together being Ontrac). The Traffic & Data Services segment includes data capture, analysis and interpretation of traffic and pedestrian data to aid with the planning, investment and ultimate operations of a transport environment and it also includes SEP Limited (SEP). It provides software products, consultancy services and delivers customized projects to solve a range of problems within the transport and traffic sector. It specializes in solving a range of data capture, reporting and resource optimization problems along with the provision of a range of associated professional services. more »

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Avation PLC is engaged in leasing of aircraft. The Company is a commercial passenger aircraft leasing group managing a fleet of 38 aircraft, which are leased to airlines globally. The Company's fleet includes Airbus A220, A320 and A321 narrow-body jets, Boeing 777-300ER and Airbus A330-300 twin-aisle jets, ATR 72 twin engine turboprop aircraft and five older Fokker 100 jets. It supplies regional, narrow-body and twin-aisle aircraft to the airline industry. It serves the commercial airlines. It owns, through its subsidiaries, a range of commercial passenger jet aircraft, which are leased to various airlines in Europe, Asia and Australia. The Company's subsidiaries include Avation Capital S.A., which is engaged in financing, and Capital Lease Aviation Limited and MSN429 Leaseco Limited, which are engaged in aircraft leasing. more »

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  Is LON:AO. fundamentally strong or weak? Find out More »

1 Comment on this Article show/hide all

moonglum63 26th Nov '14 1 of 1

UK sales may hold up, but across EU...doubtful.

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Alex Naamani


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