Monday, July 12, 2010

AerCap Continues Operational Progress

AerCap (AER) continues to develiver planes, sign leases, and buy new planes. The market continues to ignore the continous progress in growing operations. AER released its Q2 transactions report today showing 18 new deliveries and the purchase of 19 planes plus contracts to buy 9 more.

AER trades at 5.5x earnings and regularly trades in whipsaw fashion though the company continues to plod along with limited risk. The market percieves a much bigger risk then the reality. AER and Genesis Lease (GLS) survived the financial crisis with limited impact. They've had only slightly material impacts from the Great Recession and yet they can't get traction in the market. Not that its all that surprising considering the general market and Stone Fox Capital owns several other stocks with similar valuations.

The CEO continues to remain very positive on the economy and specifically Europe considering their Headquarters in the Netherlands. After all he was very bullish of Europe during the Q1 Conference Call and adamant that Greece wouldn't impact operations. So far he has been much more accurate then the hysterical economist on TV.


AER remains a top holding in both the Opportunistic and Growth Portfolios. Though the stock is volatile, the operations remain poised for continued steady growth. We expect the stock to continue bouncing higher and higher.

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