GACF- main thing keeping me long is
Avolar. GACF has a 5 year contract to do maintanance for all their planes. Avolar is a start up Mexican Airlines. They only had 1 plane last December, 3 planes in March, and from my converstaions with the GACF, Avolar now has 6 or 7 planes. I have already estimated using GP margins based on past CCs that once Avolar gets to 10-12 planes, which should be by December, GACF will make a minimum of $.08 EPS fully taxed fully diluted/year from that alone( also GACF has stated Avolar is shooting for 30 planes by 2008). However, because yearly checks are where GACF makes their main revenues, and that won't start till late 06, the main revenues from Avolar won't be seen till 2007. In the meantime, they have revenues coming in from the BCI partnership( BCI is multi billion dollar aircraft rental company and GACF has a 30% partnership with them as far as the profits made from buying and selling planes together as well as from rental revenues on planes not sold yet but rented out to different Airlines). As far as the BCI partnership, although GACF will be taking in rental revenues, I have not seen any trading deals mentioned this last qtr, so I'm dissapointed in that. However, GACF will have $.02 fully taxed coming showing in the June qtr from a trading deal carried over from last qtr. In additon, GACF has a used parts division, which according to their last CC was doing well, so I expect $.01-$.02 from that division for the June qtr. So, besides the $.03-$.04, there will also be the rental revenues and any maintanance GACF is doing on the six planes from Avolar, plus any additional maintanace from their regular customers. All toll, unless there are unforseen expenses, I see GACF posting $.04-$.06 fully taxed for the June qtr. That's why, it seems rediculous that the stock hit it's 52 week low this week at $1.11. I generally don't hold into earnings anymore, however with the company looking healthy with their used parts division as well as Avolar building, and a possible $.04-$.06 coming in for the June qtr, I feel there is very little downside risk here at $1.14. Wade
