In this article, we discuss the 5 best very cheap stocks to buy now according to hedge funds. To read the detailed analysis of current economic conditions and forecast, go directly to the 12 Best Very Cheap Stocks To Buy Now According To Hedge Funds.
5. AerCap Holdings N.V. (NYSE:AER)
Number of Hedge Fund Holders: 54
PE Ratio: 6.27
AerCap Holdings N.V. (NYSE:AER) is an Ireland-based aviation leasing and finance service company that has 1,700 aircraft in its fleet, including nearly 1,000 engines and more than 300 helicopters.
On November 14, AerCap Holdings N.V. (NYSE:AER) reported a major transaction of purchasing five General Electric GE90-115B engines from Mubadala Investment Company PJSC-owned Sanad.
AerCap Holdings N.V. (NYSE:AER) was covered by 6 Wall Street analysts over the previous three months, and all keep a Buy rating. The average price target of $82.67 has an upside of 23.06% as of the November 23 market close.
Horos Asset Management talked about AerCap Holdings N.V. (NYSE:AER) in its first quarter 2023 investor letter. Here is what it said:
“To explain the merits of our investments in the financial sector, I would like to end with a quick review of the difference between the management of their businesses, compared to the two risks we have just discussed, i.e., maturity mismatch and (excessive) financial leverage of traditional banking (obviously, moral hazard has no place here, as the privileges of banking do not apply to these companies). Specifically, I am going to focus on the purest cases of financial intermediation in which we are invested: AerCap Holdings N.V. (NYSE:AER), ALD Automotive, Sun Hung Kai & Co and S&U.
Let us start with maturity mismatch, which is the first of the structural problems in banking. We own a stake in AerCap and ALD Automotive, two companies with very similar businesses in their essence. In short, these entities borrow money to acquire assets (aircraft and automobiles, respectively), lease them for a period of time (on average, seven and four years) and sell them at the end of their contract (in the case of AerCap, the longer useful life of its aircraft means that the contracts are usually renewed at maturity). If these companies were to operate like a bank, they would borrow at very short maturities and would have to continually roll over that financing to avoid falling into an unsustainable liquidity risk, should they have to repay their debt (their assets are leased). However, as we have already seen, operating with such a maturity mismatch would be a recipe for failure. In fact, Guinness Peat Aviation, the company that pioneered the aircraft leasing business in the 1970s and 1980s, ended up going bankrupt (among others), for over-reliance on short-term financing.32 A lesson never to be forgotten by Aengus Kelly, CEO of AerCap and the person who inherited the unloved assets of Guinness Peat Aviation after its sale to GECAS in 1996 (by a twist of fate, Kelly eventually acquired GECAS two years ago)…” (Click here to read the full text)
Follow Aercap Holdings N.v. (NYSE:AER)
Follow Aercap Holdings N.v. (NYSE:AER)
