3. AerCap Holdings N.V. (NYSE:AER)
Number of Hedge Fund Holders: 65
PE Ratio as of August 1: 5.71
Leading aircraft leasing provider, AerCap Holdings N.V. (NYSE:AER). AerCap, based in Dublin, Ireland, has solidified itself as a leading participant in the global aircraft leasing industry, offering a diverse variety of aircraft and engine leasing services to airlines globally. The first three of fifteen new Airbus A321neo aircraft have been delivered to AirAsia Group* (AirAsia) on a long-term lease, according to a recent announcement from the company. Delivery of the final 12 units is anticipated between 2024 and 2025. The company possesses more than 1,700 aircraft, 1,000 engines, 300 helicopters, and an order book with 327 aircraft globally. The company provides full fleet solutions to over 300 customers worldwide.
Since AER’s PE ratio of 5.71 is less than the industry’s average PE ratio of 12.03, it is currently regarded as a cheap company to buy now.
With a PE ratio of 5.71 and hedge fund sentiment of 65 in the first quarter, up from 61 in the previous quarter, it is among the best extremely cheap stocks. Frank Fu’s CaaS Capital is the company’s shareholder, owning 27,306 shares valued at $2.54 million. Analysts have a positive outlook, giving AER a “strong buy” recommendation, with an average target price of $103.7 and an upside potential of 19.73% from the current stock price of $86.61.
Aengus Kelly, Chief Executive Officer of AerCap, stated regarding Q2 2024 earnings:
“In an industry environment that has remained positive, AerCap continued to produce strong results in the second quarter. We were pleased to receive credit rating upgrades from Moody’s and S&P reflecting the company’s best-in-class performance. We continue to actively deploy capital for growth opportunities and to return capital through share repurchases and dividends to our shareholders. As a result of our outperformance during the first half of the year and our positive outlook going forward, we have raised our earnings guidance for the full year,”
TD Cowen maintained a “Buy” rating on AerCap and increased its price target from $125.00 to $130.00 in response to the strong earnings announcement.
Overall, the company’s sales, and EPS have all increased during the previous five quarters. Its resistance to industry headwinds highlights its strong financial health.
Middle Coast Investing stated the following regarding AerCap Holdings N.V. (NYSE:AER) in its Q2 2024 investor letter:
“One thing I try to do is apply what I know from one stock to another. AerCap Holdings N.V. (NYSE:AER) has been a long-time holding, and one of the reasons it is attractive to hold onto at a fair price is the huge backlog in planes that need to be built and sold to airlines. Boeing’s problems, the pandemic, supply chain issues, and so on have slowed delivery of planes and jets (Airbus is also struggling to get up to its production goals). That delay is good for Aercap’s business as the world’s biggest owner of planes, an in-demand commodity, but at some point, the manufacturers will have to figure it out.”
L1 Capital International Fund stated the following regarding AerCap Holdings N.V. (NYSE:AER) in its Q2 2024 investor letter:
“We made a number of relatively modest adjustments to the Portfolio in the June 2024 quarter, totalling less than 10% of the Fund’s investments. We added to our investment in AerCap Holdings N.V. (NYSE:AER), with the company entering the top ten Fund holdings. We consider the current share price to be highly attractive. The investment thesis for AerCap is profiled in detail in the next section of this quarterly report
Every time you catch a flight, you probably don’t spend a huge amount of time thinking about whether the plane you are sitting in was bought or leased by the airline. Yet this is an important decision for the airline management team. Aircraft leasing is a well-established, but highly specialised niche of the secured asset lending industry. There are a wide range of aircraft leasing capital providers, but publicly traded aircraft lessors are limited, and the sector is not well known outside of the industry. While AerCap is by far and away the largest participant in the aircraft leasing industry, we believe it is flying below the radar of most investors…” (Click here to read the full text)
Nonetheless, being one of the best very cheap stocks to buy now, according to hedge funds, investor confidence is strengthened by AerCap Holdings N.V. (NYSE:AER)’s outstanding financial results, raised forecast, and strong position in the aircraft leasing industry.
