Air Lease (NYSE:AL)

CAPS Rating: 5 out of 5


Player Avatar TMFBlacknGold (98.68) Submitted: 1/22/2013 4:41:52 PM : Outperform Start Price: $23.38 AL Score: +7.80

Of course I would get caught with a high entry price thanks to my CAPScall in a recent article. But hey, I'm all about accountability! It won't matter long-term anyway. Where to start? I'll post a few reasons as to why I believe Air Lease is a tremendous growth opportunity and slap a link to the 1,000 word article at the bottom for you to peruse for a more thorough analysis.

The company has a PEG of about 0.47, which speaks for itself. You may not believe a 20% per annum growth rate for the next five years, but consider that the company has about one-third of its planned aircraft fleet in hand. After jumping from 40 aircraft at the end of 2010 to 152 (expected) by the end of 2012 the company gets the benefit of the doubt from me.

Management is tremendous. In fact, there is probably no one investors would rather have at the helm of an air leasing company than Steven Udvar-Hazy (see article). He practically built the industry.

Fuel efficient aircraft will be in high demand as airlines strive to cut costs, emissions, and upgrade/replace older aircraft in their fleet. In emerging markets - where Air Lease has over 50% of its fleet - airlines have less power at the bargaining table because there is less access to capital, so companies like Air Lease can wrestle out more favorable terms for now.

I'll write more about Air Lease in the future. I would like to learn more about the company's debt and dive deeper into the drawbacks of an investment. Nonetheless, I believe this is a great hidden growth opportunity.

My recent article:

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