ThinkFirst

Air T vs. Apple? Not Even Close

Another meaningless analysis based purely on numbers without considering the nature of the companies' businesses, the size of their markets, and their competitive positions.
What does AIRT do? This from Yahoo Finance: "Air T, Inc., through its subsidiaries, provides overnight air cargo services to the air express delivery industry. It also manufactures, sells, and services aviation ground support and other specialized equipment products, including aircraft deicers, scissor type lifts, military and civilian decontamination units, and other specialized types of equipment. The company offers its products to domestic and international passenger and cargo airlines, the United States Air Force, Navy, airports, and industrial customers. As of March 31, 2007, it operated 88 cargo aircrafts under dry-lease service contracts in the United States, the Caribbean, and South America; and owned 2 aircrafts. Air T was founded in 1980 and is headquartered in Maiden, North Carolina."
Does this company have any sustainable competitive advantage? Not that I can see. Are they ever going to have high margins? I don't think so. They are in a notoriously low margin business. Is there balance sheet strong? Not particularly. About 17% debt to equity ratio. Cash equal to amount of debt outstanding.
Not only that, AIRT's business is extremely cyclical. Couple of bad quarters and the company can easily go out of business. And, to assume that it can grow its revenues at 20% per year for the next 10 years?? This is what happens when neophytes start analyzing companies without any understanding of how business works.