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Why Soul Patts owns 6% of Alliance Aviation Services Ltd

I’m always on the lookout for new shares to invest in. The big businesses have been around for a long time, we know what they do and many analysts cover them. If you invest like everyone else you’ll get the same result.

The smaller businesses are less covered by analysts and many investors don’t know much about them. I usually find out about a smaller share if it’s just come onto the market through an IPO or it’s part of a top manager’s holdings.

Investors who have proven to be able to beat the market over the long-term may hold tomorrow’s winners in their portfolio already. One of those managers I like to look it at is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), also known as Soul Patts.

Soul Patts very recently took up a 6.33% stake in Alliance Aviation Services Ltd (ASX: AQZ). Alliance Aviation says that it’s Australia’s leading air charter services operator, dedicated to providing specialised services for the resources industry, and inbound and domestic group travel.

The company has a fleet of 28 aircraft with over 400 staff. It says it can do things like transport sports teams with support staff, take school children to Canberra or take corporates wherever they need to go.

In its recent half-year report to 31 December 2017 Alliance Aviation revealed that revenue grew by 15.6% whilst profit decreased by 18.3%.

Over the past year the share price has grown by 140% over the past year, although it has been flat since the start of the year.

Foolish takeaway

Chartered flights is not my area of expertise, it’s hard to say whether Alliance Aviation would be a good buy at the moment. It’s trading at 11x FY17’s earnings, which does appear cheap and I can see why Soul Patts is interested.

I’d rather stick to what I know, I believe that one of these top growth shares is an excellent opportunity.

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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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