Out Fox The $treet

Small Cap Insight The amazing part about the financial crisis is that numerous stocks that trade below audited book values are still feeling the lingering effects on investors' willingness to buy the stocks. No matter what the financials say quarter after quarter, the stocks continue trading below the accounting value and in some cases extremely below those levels while also generating profits. In the case of FLY Leasing ( FLY ), the stock trades considerably below the established book value while earning substantial income. The company focuses on leasing airplanes to airlines all around the world with a renewed focus on buying new planes to replace an aging fleet compared to the competition. Both larger public competitors in Air Lease ( AL ) and AerCap Holdings ( AER ) have significantly newer fleets with longer average leases, but does that mean that FLY can't generate a solid return for investors? Read the full article at Seeking Alpha. Disclosure: Lo...

As an airplane leasing company, most investors probably envision the stock of AerCap Holdings ( NYSE: AER     ) trading inline with the airline industry. In fact though, it typically trades more like the financials so one should not be surprised that it currently trades below book value. The company is one of the largest airplane-leasing firms. Currently, only Air Lease Corporation ( NYSE: AL     ) trades with a larger market cap due its extremely fast growth from start up to the current level and a well respected management team that moved over from ILFC, a subsidiary of AIG . As AerCap finally trades closer to book value, investors face the interesting dilemma of whether this stock should trade closer to historical values of multiples of book value or if a new normal exists. Read the full article here . Disclosure: Long AER. Please review the disclaimer page for more details. 

After the financial crisis, numerous financial related stocks traded at prices below book values due to the fears in the accuracy of their reported balance sheets. In the years since the crisis, most of those fears have disappeared yet many financial stocks haven’t regained the valuations suggested by the improving asset bases. A prime example exists in the airplane leasing sector where the majority of the stocks trade below more » Disclosure: Long AER. Please review the disclaimer page for more details. 

Boesing (BA) announced today its first firm order for the new 737 MAX fuel-efficient, narrowbody plane, from Southwest Airlines (LUV). BA claims this is the largest order ever which apparently passes a few other recent orders that I thought had the same claims. This industry appears ripe with orders, but deliveries remain a different story. LUV ordered 208 narrowbody planes for $19B (list price not actual price). This includes an order for 150 MAX aircraft that won't even start deliveries until 2017 (or '18 or '19 if the historical delay pattern continues). BA is reporting commitments for 948 MAX planes that could climb to 1,500 by the end of next year. This truly has to be the most interesting industry where customers order hundreds of planes at a time for delivery in 5-10 years. Makes me wonder if the industry won't eventually face stiff competition from a Brazil, China, or Russia made model that is able to make planes in a more timely manner. Until then ai...

The airplane leasing sector has been promising for a while now as emerging markets expand air traffic and airlines with weak balance sheets look to cut cash outlays for new planes. Its also a much better way to play this trend then to own a airline as they typically struggle to make profits with the fierce competition in the sector yet every time we turn around another company wants to open an airline. Owning one seems like a status symbol similar to a sports franchise except airlines almost always lose value. Airplane lessors on the other hand are typically very profitable. The airplanes typically hold their values and during a period where both Boeing (BA) and Airbus struggle to get new versions out, the planes on hand remain in high demand. Its also an attractive investment because the leases are typically for 5-7 years providing for a consistent return. Unfortunately though the stock prices are not nearly as consistent. Fears of bankruptcies in the industry (leases can be canceled)...