I'll buy a little AIR here.
"AAR Corp. is an independent provider of value-added products and services to the worldwide aviation industry," per Yahoo.
biz.yahoo.com
Prior to 9/11 AIR seems to have been a pretty decent company. There were earnings, a dividend, and steadily rising book value. Sales had increased every year from '93 to '00. That's all gone now. In addition, the balance sheet has worsened (imo), because the debt/eq ratio has increased.
I just don't see the company returning to anywhere near its former glory. And the stock... cigar butt territory imo.
I will buy AIR mostly based on a mechanistic approach. Price/sales is relatively low, and stock is less than 1/2 of tangible book value (S&P number). The stock price has averaged at least 1x book in every year since at least '93 (as far back as my records show.) But of course, "aviation" wasn't a dirty word to investors then.
It appears to me the company's pretty aggressive in looking for and moving into areas in the aviation/aerospace sector where they believe they can secure profitable sales. Two positives from the latest quarterly:
"While we are encouraged by the improvement in our results, we are concerned about the potential near-term effect on demand for parts and services in the commercial aviation industry as a result of reduced passenger traffic caused by economic uncertainties and the war in Iraq," said AAR President and CEO David P. Storch. "However, longer term the airline industry must seek lower cost solutions to survive, and we are well positioned to benefit as the airlines move to lower cost maintenance and supply solutions."
and...
"Manufacturing segment sales increased 25.9% over third quarter last year driven by higher sales of the Company's manufactured products that support the U.S. Military's mobility requirements and increased sales of non-aviation related composite structure products."
Another, only-a-small-position-for-me, stock. |
