Member Info for AndyOJ2

Update: Doric Nimrod Air Three
This aircraft leasing fund has, like VPC Specialty Lending, covered here last week, attracted the attention of investors known for their ability to extract value. Elliott Investment Management, an “activist”, has bought a stake in Doric Nimrod Air Three as well as in sister fund DNA2 and in Amedeo Air Four Plus, a similar vehicle.

The shares at 47.5p stand 43pc below our tip at 83p in August 2019, although readers who followed our advice will have received 26.8p a share in dividends.

We have little concern that the airline to which DNA3’s Airbus A380 planes are leased, Emirates, will fail to pay the rent; hence we remain confident that the trust will pay its divis. There is more scope for doubt over the residual value of the aircraft when the leases expire in 2025, although things have changed markedly since the dark days of the pandemic, when no one could see a future for these enormous airliners.

Now Airbus and Boeing are struggling to fulfil orders on time, partly thanks to global supply chain bottlenecks, and suddenly having aircraft in their possession is valuable again for airlines. So Emirates may decide to extend its leases or buy the planes outright; even if it allows the leases to expire there is now more chance that value can be realised from these aircraft on the open market.

Nick Greenwood, manager of the Migo Opportunities trust, says aircraft leasing is one of the sectors he is “taking a good look at”. Hold.

Questor says: hold

Ticker: DNA3

Share price at close: 47.5p

looks like they have a thesis about aircraft shortage and Emirates - interesting

Oddly ignored events at the DNA aircraft funds

Elliott IM has a track record for buying into special situations and ‘shaking things up’, which is I would argue something of a euphemism. So when it appears on the share register it is always worth asking - what are they up to?

So, let’s ask that question of the aircraft leasing funds, specifically DNA 2 - one of my favorite stocks - and DNA 3, its sister fund. Both own lots of A380s which are leased to Emirates. These planes may or may not be worth nothing or $12m each or $18m or even $30m - I genuinely don’t know the answer because the key player here WAS Emirates. If it wants to carry on flying its A380s, and by all accounts, it does, then maybe those planes are worth closer to $18m or even $30m (the latter is unlikely in my view).

Anyway, we have a new player on the scene in the shape of Elliott who might now be a key player.

Earlier this week Weiss sold its stake in DNA2, presumably having made a decent profit. Here’s the RNS of the sale:

https://www.londonstockexchange.com/news-article/DNA2/holding-s-in-company/15675694

Then Elliott IM bought a big stake in DNA 2 which now amounts to 11.25%: the RNS is here :

https://www.londonstockexchange.com/news-article/DNA2/holding-s-in-company/15675717

Now Elliott has also, in September bought a stake in DNA 3 amounting to what looks like 14%. The RNS is here:

https://www.londonstockexchange.com/news-article/DNA3/holding-s-in-company/15642576

What is Elliott up to? Do they think they can get the terminal value of those planes higher by doing some ‘two for one’ deal with Emirates? Who knows - I certainly don’t but I would observe that the DNA 2 share price has come off recent highs at around 87p and the generous dividend is still being paid.

signals 1.53 returns over 2 years v 93p buy now. Not baddish - quite goodish

Thank you - v nicely written up. I made a big commitment to all three in the depths of the pandemic as income shares with an option on the aircraft. Didn’t think DNa1 would come up so well so am 50% dna3, 40%dna2 and 10% dna1. Fascinating to see this play out over the next year but 80% return on dna1 has been a great start and I love the dividends. My own view is that prices for aircraft will firm. EK have hired 1000 pilots for the big bird and are doubling down on their 5th freedom model. Very effectively from what I can see. Just the 6 dailies into LHR must be £15 - 20M a day revenue. Fascinating to see how quickly they can get to pre pandemic levels for the network

Do you have similar calculation for DNA 3 @carcosa61

https://www.lse.co.uk/news/DNA/trading-updates-premier-miton-assets-dip-challenger-energy-cfo-quits-dei3ozqcn96bl4o.html

https://edition.cnn.com/travel/article/a380-superjumbo-comeback/index.html

https://edition.cnn.com/travel/article/a380-superjumbo-comeback/index.html

https://edition.cnn.com/travel/article/a380-superjumbo-comeback/index.html

to be fair I had to work to understand his comments on CRP etc. The price simply looked too good to be true. But if you look at the royalty split and how that changes over time then it becomes evident that this is a good investment but not without limits. The CRP is rapidly being repaid and then the percentage of profit starts to change inexorably as volumes increase. What looked like a gusher of profit becomes a steady good stream of revenue but not a gusher. I have only been in for a while (two months) but am nicely up and enjoying the dividends. I was looking at buying a lot more but having dug into the details of the profit split, I'm happy to sit on my hands and reap the dividends without overallocating to this good but not outrageous share

all true and all good points. And then you test drive a tesla and it is so much better than other cars that you go and buy one. And then you enjoy it every single minute. So advice - don't test drive one because all the nice logical reasons go out the window

Initiated coverage with buy and share price target of 175p. Citing “massive free cash flow”. They are conservative in dividend forecast but “not surprised by windfall dividends.

What was that 200 day MA? Getting pretty close.....

https://www.asktraders.com/analysis/sylvania-platinum-shares-are-up-55-6-this-year-on-surging-pgm-prices-whats-next/

was that a 467K and a 125K buy in space of a couple of minutes?

Stock is very tight here. Cannot buy even small quantities on HL. And is selling for someway above asking price. Will not require much demand to move substantially. Selling at a fraction of revenue and now moving into profitability - looks like a likely target. Data driven marketing will only grow this year.

you are probably right. I bought about 450K over the Nov - Jan time at an average of about 4.8p so every penny is q nice. And I think it would not take much for this to stabilise and get back to profit or attract a bid. It has some real merits inside it if they can keep control of costs . A small improvement this half would translate well and even a small amount of buying would deliver a sharp upward move. Hoping that the volumes moves from second hand prius to a couple of new Teslas

something happening?

I guess it won't help that the print version says "I raise my target price to 45p" instead of 145p