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.
Avation
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
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%…
