By Jason Fittler
AIX was established as a diversified infrastructure investment fund and listed on the ASX in 1997.
The portfolio is now heavily weighted towards airports, which represent 90% of the portfolio.
AIX intends to raise A$211m by way of a 1-for-2 non-renounceable rights issue, creating 192m new securities at a price of A$1.10. The offer is fully underwritten and the proceeds will be used to pay down corporate debt of A$160m, for future capex of A$42m and future refinancing of A$5m.
The consensus price target on this stock is $2.00 some 36% above the current market price of $1.30. The company has a forecast dividend of 7.7% in the 2010 year. It is expected to increase to 8% in the 2011 year. All dividends will be paid out of cash flow.
Given the capital growth and yield this stock will provide an excellent return on your investment in the coming years. As such I would look to buy this stock with a 3-5 years time view. It may not happen quickly but it will happen.
This is quality stock which holds quality assets but has been sold down by nervous investors.
Now is the time to add this to your portfolio, hold for the income and long term capital growth.
There are indeed some head winds in the near future but long term you will yield good results for this stock.
If you would like more information on Australian Infrastructure Fund (AIX) please give us a call on (07) 4771 4577.