Air Lease (AL)

(Top Pick Aug 15/16, Up 36%) They are like a distributor for BA-N and Air Bus. He lightened up, but they are still growing. It is a hold now.

(A Top Pick Dec 14/15. Up 17.49%.) He still likes this. They’ve been delivering strong results for 3 years, but the PE multiple has continued to contract, and it has finally seen a lift. Had 21% EPS growth last quarter, and a 19% ROE on a pre-tax basis adjusted, which was their highest ever.

(Top Pick Jun 15/15, Down 21.69%) It is still growing at the same rate but the PE is now only 8. It is more attractive today than 3 years ago. He is still a believer. There is concern about low interest rates but that has been the case for several years. They are growing at double digits.

On the valuation side it does not get as much love as it should. The share price has been going sideways for three years and the earnings have been going up.

Aircraft leasing company. Earnings trajectory is very, very good. One of the problems is the chart. You can have a good company, but a technical drop in the chart. With a continuation of lower lows, you face a wall of sellers every time. From a bottom-up standpoint, he doesn’t mind this space at all, but technically this has a lot of work to do. If it gets through the gap between $30 and $35, he would be a little more constructive on it.

(Top Pick Dec 11/14, Down 10.97%) The chart is going sideways and the earnings are growing 15-20%. There is a high likelihood of appreciation. Air craft leasing. Excellent management. They have an order file of $34 Billion and $9 Billion in assets. They have room to grow.

They just came out with great earnings. It is attractive, but reminds him of EFN-T which didn’t do anything for a year. He might have made AL-N a top pick today. He likes to hold stocks 3-5 years.

(Top Pick Jun 4/14, Down 12.63%) Management built the largest airline leasing company in the world and now are doing it again with AL-N. It did not do much in the last year, but he still likes it. They are still a small company, but brought their contacts from the past. They partnered with a private equity fund to raise money for them. They manage the leases.

It was a Top Pick a couple of times. He expects it to appreciate since there is an upgrade cycle involving 600 replacements each year in the industry. AL-N is tapping into the whole growth zone. 18% revenue growth at present.

All the planes before 9/11 were built on $30 oil. They buy planes and lease them around the world.

Run by the pioneer of the airline leasing industry. There is room for new players, but they are so entrenched that he is still comfortable with it.

Earnings are expected to grow at 29% this year and revenues are growing at about 20%-22%. Trading at 18X earnings. Growth valuation multiples are very attractive. They buy new planes from Boeing (BA-N) and Airbus in bulk, so they get volume discounts, and are 1^st in line. They then go to the smaller airlines around the world who, if they want to buy a plane from Boeing, have to pay full price and wait further back in line, and probably have higher cost of capital. It is cheaper for them to lease from this company than it is to buy direct. Yield of 0.29%.