BBA Aviation continues uptrend

BBA Aviation plc (BBA.L) strengthened 0.30 GBX (or 0.1%) to close at GBX215.90. Compared with the FTSE 100 index, which fell 134.6 points (or 2.3%) on the day, this was a relative price change of 2.4%.

Price Change % 1-day 1-month 1-year BBA 0.14% 6.15% 5.78% Miscellaneous Transportation -1.79% -8.42% -11.79% FTSE 100 -2.3% -3.51% -5.05%

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TECHNICAL ANALYSIS

Uptrend

Support: the support price is hovering at the GBX198.28 level. Volume traded at the strong support price zone was 1.1 times average during the four occasions when the support price was breached. In the last month the lowest price was GBX198.28 on Mar 07. The second lowest was GBX200.0 on Mar 06, the third lowest was GBX200.70 on Mar 05 and the 4th at GBX202.0 on Mar 08.

Rises to Falls: In the last three months the number of rises outnumbered falls 37:28 or 1.3:1.

Trailing month: in the last 20 trading sessions there has been a net rise of 6.62%; the stock has advanced eleven times and the biggest one day rise was 2.9% on Mar 13.

PRICE VOLUME DYNAMICS

Volatility: the stock traded between an intraday high of GBX216.60 and a three-day low of GBX212.40, suggesting a trading opportunity between peaks and troughs. The average daily volatility of 3.4% places the stock in the 2nd quartile in the market meaning it is moderately volatile.

Volume: the volume was 0.6 times average trading of 719,751 shares.

% Discount to high: the last price is at a discount of 5.0% to the 12-month high of GBX227.20 eleven months ago on 03 May, 2011.

% Premium to low: the last price is at a premium of 41.3% to the 12-month low of GBX152.80 eight months ago on 24 Aug, 2011.

Volume weighted price (VWP): the price is at a premium of 1.8% to the 1-month volume weighted average price (VWP) of GBX212.14. Given that this premium has exceeded 1.8% seventy-seven times and been under 1.8% fifty-one times in the last year, the upside:downside probability is estimated at 77:51 or 1.5:1.

Beta: The Beta of this stock is 1.1. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

Standard Deviation (SD): SD is a statistical measure of deviation from the mean. The SD of 1.8% gives it a percentile rank of 26 meaning that 26% of stocks in the United Kingdom market are less volatile than this stock.

PRICE PERFORMANCE RANK IN INDICES AND SECTORS

The stock is in 3 indices and 2 sectors.

The stock's rise went against the trend set by the following index and sectors:

FTSE 100 index which was down 134.6 points or 2.3% to 5,703.8,

The Total United Kingdom Market of 1371 stocks and 187 units traded today, which was down 107.2 points or 2.0% to 5,228.2,

Miscellaneous Transportation sector of 13 stocks traded today, which was down 104.2 points or 1.8% to 5,708.2

Percentile Rank 1-day 1-month 6-months BBA 86 83 74 Miscellaneous Transportation 42 26 23 FTSE 100 34 44 49

RELATIVE VALUATION INDICATORS [RVI] FUNDAMENTAL ANALYSIS

The stock meets the following value criteria set by Benjamin Graham:

-"A dividend yield of at least two-thirds the triple-A bond yield"; the stock's dividend yield is 1.09 times the triple-A bond yield of 3.5%.

The stock has a score of 5 out of 9 set by Joseph Piotroski [pass mark greater than or equal to 5 ]:

Positive net income; Positive operating cashflow; Return on assets improvement [from 3.5% to 4.8%]; Good quality of earnings [operating cashflow exceeds net income]; Improvement in gross margin [from 19.0% to 19.21%].

Other Bullish Signals:

- The earnings yield of 6.32% is 1.8 times the 10-year bond yield of 3.5%.

- Return on Assets of 4.8% versus sector average of 3.8% and market average of 1.3%.

- Dividend Yield of 3.8% (based on trailing 12 months dividends of GBX8.22) versus sector average of 3.6% and market average of 4.5%. The company paid out a dividend of GBX8.22 in the past 12 months. The 10-year bond yield is currently 3.5%.

- The Q Ratio, defined by James Tobin as MCap divided by Total Assets, is 0.8. Compared with the rest of the market the stock is undervalued.

Bearish Signals:

- Price/Earnings of 15.8 versus sector average of 11.5 and market average of 11.5. We estimate the shares are trading at a current year P/E of 14.9 and a forward year P/E of 14.1.

- Price/Sales of 0.87 versus sector average of 0.4 and market average of 0.9. We estimate the shares are trading at a current year Price/Sales of 0.9 and a forward year Price/Sales of 0.8.

- Return on Equity of 13.5% versus sector average of 14.1% and market average of 11.2%.

- Price/Earnings/Growth of 0.4 (based on the year-on-year growth in trailing 12 months EPS of 36.4%) versus sector average of 0.2 and market average of 0.8. We estimate the shares are trading at a current year Price Earnings Growth of 2.47 and a forward year Price Earnings Growth of 2.33.

RELATIVE VALUATION INDICATORS [RVI] TECHNICAL ANALYSIS

Bullish Signals:

- The price increased 1.9% in the last week and advanced 6.1% in the last month.

- In the United Kingdom market of 1,371 stocks and 187 units traded today, the stock has a 6-month relative strength of 74 indicating it has outperformed 74% of the market.

- Also, the relative strength percentile is improving at 74 for 6 months, 77 for 3 months and 83 for 1 month.

- The price to 50-day EMAP ratio is 1.05, a bullish indicator. In the past 50 days this ratio has exceeded 1.05 30 times suggesting further upside. The 50-day EMAP has increased to GBX205.30. An increase is another bullish indicator.

- The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 214.7 minus the 26-day EMA of 211.4 is positive suggesting a bullish signal. Both the 12-day EMA as well as the 26-day EMA are rising, another bullish signal.

- The price to 200-day MAP ratio is 1.15, a bullish indicator. The stock is trading above both its MAPs and the 50-day MAP of GBX204.24 is higher than the 200-day MAP of GBX187.47, a bullish indicator. The 200-day MAP has increased to GBX187.47. An increase is another bullish indicator.

SHAREHOLDER RETURNS

Trailing one week: the stock rose three times (60% of the time) and fell twice (40% of the time). The volume was 0.8 times average trading of 3,598,755 shares. The value of GBP1,000 invested a week ago is GBP994 [vs GBP982 for the FTSE 100 index], for a capital loss of GBP6(or loss of 0.6%).

Trailing one month: the stock fell eleven times (48% of the time), rose eleven times (48% of the time) and was unchanged once (4% of the time). The volume was 0.9 times average trading of 15,834,522 shares. The value of GBP1,000 invested a month ago is GBP1,061 [vs GBP965 for the FTSE 100 index], for a capital gain of GBP61(or rise of 6.1%).

Trailing one year: the value of GBP1,000 invested one year ago is GBP1,106 [vs GBP950 for the FTSE 100 index], including a capital gain of GBP58 and dividend reinvested of GBP48. The total return to shareholders for 1 year is 10.6%.

PVGBP1000 1-week 1-month 1-year BBA GBP994 GBP1,061 GBP1,106 Miscellaneous Transportation GBP917 GBP916 GBP882 FTSE 100 GBP982 GBP965 GBP950

FINANCIALS

Annual Report for the year ended December 31, 2010 (year-on-year comparisons with previous corresponding period)-

Favourable Changes: net profit growth 35.9% to GBP65.1m ($US100.1m); EPS growth 36.4% to 15.0 British penny (US23.07c); interest cover up 80.3% to 5.4; EBIT Margin up 6.0% to 8.8%; a track record of profits in 3 of the last 3 years; total liabilities to total assets down 3.0% to 0.6; EBIT to total assets up 16.6% to 7.6%; Sales to total assets up 8.9% to 0.9.

Unfavourable Changes: total liabilities to operating cash flow ratio of 5.8 compares unfavourably with the Joseph Piotroski benchmark of less than 4, it had deteriorated by 12.5% from the previous year.; current ratio down 24.3% to 1.1; Working capital to total assets down 72.8% to 2.7%.

Major Common Size Ratios: total non-current assets to total assets up from 67.5% to 67.7%; intangibles to total assets up from 41.7% to 42.4%; total current assets to total assets down from 32.5% to 32.3%; fixed assets to total assets down from 24.3% to 23.9%; current debtors to total assets up from 14.1% to 14.5%; cost of goods sold to sales down from 81.0% to 80.8%; EBIT to Sales up from 8.3% to 8.8%; profit before tax to sales up from 5.6% to 7.2%; profit after tax to sales up from 4.4% to 5.5%; tax expenses to sales up from 1.3% to 1.7%.

MARKET SHARE

BBA Aviation vs Miscellaneous Transportation sector [Miscellaneous Transportation sector Total in Brackets]

Net Profit of GBP65.1 million (US$104.2 million) [11.9% of aggregate sector net profit of GBP545.4 million; down from 15.2% in the previous year.]

EBIT of GBP104.6 million (US$167.4 million) [6.9% of aggregate sector EBIT of GBP1.5 billion; down from 10.5% in the previous year.]

FUNDAMENTALS

EPS growth: The implied future growth rate of earnings per share required to justify the current Price Earnings Multiple of 15.8 on trailing twelve months is 2.0%, based on a formula devised by Benjamin Graham. This is lower than the year-on-year growth rate in eps of 36.4%, suggesting the stock may be undervalued.

Investment return: the nominal investment return, defined by the sum of 3.8% yield and 36.4% earnings growth, is 40.2%. After allowing for inflation of 4.2% the real investment return is 36.0%. The nominal investment return divided by the average P/E is a multiple of 2.5, which compares favourably with the benchmark of 2.

ISSUED CAPITAL

Based on 476,843,046 issued equity shares the market capitalisation is GBP1 billion (US$1.6 billion).

ACTIVITIES

BBA Aviation plc provides aviation services focusing on flight support, and aftermarket services and systems. Its flight support services include refueling, cargo handling, ground handling, and other related services to the business and commercial aviation markets. The companys aftermarket services and systems activities comprise overhaul of jet engines; supply of aircraft parts; and design, manufacture, and overhaul of landing gear, aircraft hydraulics, and other aircraft equipment. It also assembles, sells, and overhauls fuel gauging and measurement systems to defense and commercial airframe OEMs, tier one suppliers, and air frame operators. BBA Aviation plc operates primarily in North America, the United Kingdom, Asia, and the Mainland Europe. The company was formerly known as BBA Group plc and changed its name to BBA Aviation plc in November 2006. BBA Aviation plc was founded in 1897 and is headquartered in London, the United Kingdom.

TOP MANAGEMENT

The chairman is Michael Harper and the chief executive officer is Simon Pryce.

REPORTED BUYING

Reported Buying:

August 22: Bba Aviation Plc director buys

Bba Aviation Plc (BBA.L) director Simon Pryce bought 20,000 shares worth approximately GBP32,018.8 (US$5.2 million) on August 19, 2011. The purchase price was GBX160.094.

August 11: Bba Aviation Plc director buys

Bba Aviation Plc (BBA.L) director Chris Masters bought 10,000 shares worth approximately GBP17,249 (US$2.8 million) on August 11, 2011. The purchase price was GBX172.49.

August 09: Bba Aviation Plc director buys

Bba Aviation Plc (BBA.L) director Judith Harper(wife of Michael Harper) bought 10,000 shares worth approximately GBP17,778.7 (US$2.9 million) on August 09, 2011. The purchase price was GBX177.787.

June 15: BBA Aviation substantial shareholder buys

BBA Aviation (BBA.L) substantial shareholder BBA Group Employee Share Trust bought 4,366 shares worth approximately GBX912,494 (US$1.5 million) on June 08, 2011. The last price was GBX214.17.

June 15: BBA Aviation substantial shareholder buys

BBA Aviation (BBA.L) substantial shareholder Newton Investment Management Limited bought 6,713 shares worth approximately GBX1.4 million (US$2.3 million) on June 08, 2011. The last price was GBX214.17.

BUSINESS NEWS ROUND UP

The last 5 company announcements are:

March 26: BBA Aviation announces AGM

BBA Aviation has announced its Annual General Meeting will take place on April 24, 2012.

February 27: BBA Aviation will appoint Non Executive Director

BBA Aviation will appoint Susan Kilsby as a Non Executive Director. The effective date is April 10, 2012.

January 04: Bba Aviation: Signature Flight Support acquires three new locations

[Company Release] BBA Aviation plc today announces that Signature Flight Support ("Signature") has recently acquired the assets of Azalea Aviation in Mobile, Alabama for an initial consideration of $22.0m with further payments of up to $5.3m over a 5 year period. Signature has also acquired 95% of Arrindell Aviation Services in St Maarten, Caribbean for a cash consideration of $7.8m.Azalea Aviation incorporates two sole source Fixed Base Operations ("FBOs"), the Mobile Air Center at the Mobile Regional Airport and the Downtown Air Center at the Mobile Downtown Airport with long lease terms of over 26 and 30 years respectively.

December 21: Bba Aviation : ASIG awarded new contract by British Airways at London Stansted and renews agreement at Bangkok Suvarnabhumi Airport

[Company Release] ASIG, an industry leader in aviation services, announced today that it has been selected by British Airways as the new aircraft refueler at London Stansted Airport (STN) for their scheduled cargo operation. STN is ASIG's third dedicated refueling operation for British Airways which include operations at London Heathrow (LHR) and London Gatwick (LGW).

December 07: Bba Aviation: Ontic signs license agreement for 300 products with Honeywell

[Company Release] Ontic, the aerospace industry's leading performance-driven producer of licensed and/or acquired OEM legacy products and systems, has signed a new license with Honeywell. This latest agreement continues a 28 year licensing relationship between the two companies.The license is for the new manufacture and repair of 300 products that will transition to Ontic from 8 Honeywell divisions in the United States.

Currency Conversion: Great Britain Pound GBP1= US$1.5877 [or US$1=GBP0.63]; Against the US$ the GBP fell 55.74 basis points (or 0.6%) for the day; strengthened 0.1% for the week; strengthened 0.3% for the month; declined 2.6% in the past year. GBP1 = 100GBX.

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