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Strategies & Market Trends : Value Investing

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To: TimbaBear who wrote (13603)	1/5/2002 3:49:41 PM
From: Night Trader	Read Replies (2) of 78689

TimbaBear, I wonder if you (or anyone else) could take a look at the following company. International Aircraft investors (IAIS), trading at around $1.60, owns and leases a fleet of 15 airliners to smaller airlines. It has fallen hugely over the past few months due to fears of contraction in the industry. It has been profitable over the past 5 years with an average income of 30 cents a share. Moreover, as I understand it the planes are depreciated at 7% while the real world rate is closer to 5%. This difference of 2 percentage points equals 4.5 million, almost the market cap of the company. Tangible book is about $10 a share but that may be understated for the same reason as above. There has also been insider buying (post 9/11) by 3 different people at 2-3 times todays prices (and already 66% insider owned): biz.yahoo.com Risks are the continuance of demand for used airliners and the very high amount of debt, though that is being paid off by 5 million a quarter. The book value is highly leveraged to the value of their fleet, so that if that value was reduced greatly the book value would vanish. Being so small now it is also fairly illiquid, so much so that with some moderate buying in late December I now hold close to 1% of the float. I would not invest any money you could not afford to lose - the stock is basically a call option with no expiration. Still the risk/reward looks favorable to me.

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