We recently compiled a list of the Top 10 Stocks to Buy According to Eagle Capital Management. In this article, we are going to take a look at where AerCap Holdings N.V. (NYSE:AER) stands against the other stocks.
Eagle Capital Management, a New York-based hedge fund, was founded in 1988 by Beth and Ravenel Curry. Their son, Ravenel Boykin Curry IV, joined the firm around the early 2000s after managing a portfolio at Kingdon Capital and is currently a key partner. A Yale University graduate with an Economics degree and an MBA from Harvard Business School, he plays a pivotal role in the firm’s strategy. Historically, Eagle has outperformed major benchmarks, including the broader market and the Russell Value Index. Over five years, Eagle delivered a 5.7% return versus the market’s 2.4%, and since its inception, it has generated a cumulative return of 2,031%, significantly surpassing both indices.
Eagle Capital Management adheres to a disciplined investment philosophy centered on identifying undervalued companies with unrecognized long-term growth potential. The firm employs a fundamental, bottom-up research approach, focusing on the key drivers of long-term value creation. By maintaining an extended investment horizon, Eagle Capital is able to take a distinctive perspective on industry and company trends. The firm’s investment strategy prioritizes businesses with two essential characteristics: strong underlying assets capable of generating cash flow and sustaining value even in challenging market conditions, and transformative changes within the company that remain unrecognized by the broader market yet are likely to drive future growth. This approach aims to provide downside protection during market downturns while positioning the portfolio for enhanced returns as these changes materialize. These core principles have been integral to Eagle Capital’s strategy since its founding, forming the foundation of its competitive advantage and contributing to its consistent market outperformance since 1988.
Moreover, Eagle Capital Management follows a value-oriented investment strategy with a long-term perspective, assessing price in relation to intrinsic value rather than relying solely on traditional valuation metrics like price-to-earnings or price-to-book ratios. The firm’s investment team focuses on long-term prospects, particularly beyond five years, analyzing business growth, industry dynamics, and margin potential while identifying opportunities that the broader market may overlook. A key component of Eagle’s strategy is maintaining a “Margin of Safety,” achieved through valuation discounts, business resilience, growth potential, and strong, experienced leadership.
The firm concentrates its portfolio on high-conviction investments, typically holding 25-35 stocks. As of Q4 2024, it holds over $27.4 billion in 13F securities, and its top ten positions account for 57.62% of its portfolio. This approach allows Eagle to focus on asymmetric risk opportunities, ensuring that its top positions offer significant upside potential while maintaining strong downside protection. Adopting a private equity-style approach to public equity investing, Eagle builds positions in high-quality businesses with sustainable returns and durability. A rigorous due diligence process precedes any investment decision, and the firm leverages direct access to senior management at portfolio companies to gain deeper insights into long-term strategies, enabling decisive action when the right opportunities emerge. Since its inception, Eagle has consistently applied the same investment philosophy, aiming to generate superior returns through rigorous valuation analysis and a long-term perspective. The firm’s long-term investment horizon allows it to take a differentiated approach to market trends, focusing on businesses undervalued relative to their intrinsic earnings power.
Our Methodology
The stocks discussed below were picked from Eagle Capital Management’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A commercial jetliner taking off, highlighting the advanced airframe and engine parts produced by the company.
AerCap Holdings N.V. (NYSE:AER)
Number of Hedge Fund Holders as of Q4: 69
Eagle Capital Management’s Equity Stake: $1.14 Billion
AerCap Holdings N.V. (NYSE:AER), a global leader in aviation leasing, delivered strong financial results for the fourth quarter and full year ending December 31, 2024, achieving record earnings and solid operational performance. On February 25, the company reported a net income of $671 million for Q4 and $2.1 billion for the full year, while adjusted net income stood at $624 million for the quarter and $2.3 billion for the year. It also announced a $1 billion share repurchase program, reflecting confidence in its financial strength. CEO Aengus Kelly highlighted the robust demand for leased aircraft, engines, and helicopters, which drove record operating cash flow and earnings per share. The company also capitalized on asset sales, generating $869 million in Q4 with a record gain on sale of $260 million.
Key financial metrics further demonstrated AerCap Holdings N.V. (NYSE:AER)’s strong performance, including a return on equity of 16% and an adjusted return on equity of 15% for Q4. Operating cash flow reached $1.3 billion for the quarter and $5.4 billion for the year, while the unlevered gain on sale margin stood at 43%, translating to 2.6 times book value on an equity basis. The company continued to expand its fleet, investing over $2 billion in CFM LEAP engines in Q4, bringing total new engine orders to more than $5 billion in 2024. Throughout the year, the company returned $1.6 billion to shareholders through share repurchases and dividend payments, boosting its book value per share by approximately 13% to $94.57 as of year-end.
AerCap Holdings N.V. (NYSE:AER)’s Board of Directors approved an increase in its quarterly cash dividend to $0.27 per share, up from $0.25 in 2024. The dividend will be paid on April 3, 2025, to shareholders of record as of the close of business on March 12, 2025, reinforcing the company’s commitment to returning value to its investors. AER stands out as a strong investment due to its record-breaking financial performance, robust cash flow, and consistent shareholder returns. With its share repurchase program, a growing dividend, and increasing demand for leased aircraft, the company is well-positioned for sustained profitability and long-term growth.
Overall AER ranks 10th on our list of the stocks to buy according to Eagle Capital Management. While we acknowledge the potential of AER as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AER but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.