Friday, 21 September 2007

Brent Todd Keeps Thumbs Up for Aeromechanical

Brent Todd, an influential Vancouver broker, wrote that despite many past frustrations, he is sticking with AeroMechancial Services and recommending it as buy up to $0.70 a share.

Todd wrote in his most recent newsletter that AeroMechanical came through years of waiting and waiting and waiting for regulators to approve installation of its groundbreaking tracking and communications equipment on board a host of commercial aircraft.

And once those approvals were received, more waiting followed for airlines to adopt the technology.

“These carriers make decisions at glacial speeds and once made deploy the devices at an even slower speed,” the Vancouver-based, small & micro-cap specialist at Canaccord wrote.

“For us, the question surrounding (AeroMechanical) was never really about whether the product was good enough but more about whether it could stay financially solvent until sales and development caught up to produce enough revenue to sustain the company,” Todd added.
But having examined the above issues in detail, Todd concluded that the Calgary aerospace firm was on healthy financial ground and that the years of waiting may soon be replaced with years of rewards.

In particular, Todd pointed to the joint marketing contract with the venerable British aerospace firm of Meggitt PLC to sell AeroMechanical’s equipment directly to major aircraft manufacturers around the world and the much hoped-for green light from the Chinese government to install on all of China’s vast commercial fleet.

“We feel any serious development from China or the Meggitt deal would have a very positive impact on the share price and do not see a lot of downside to the company financially, Todd said.

To view the full report please click here.