If you are looking for the best ideas for your portfolio you may want to consider some of Greenlight Capital’s top stock picks. Greenlight Capital, an investment management firm, is bullish on AerCap Holdings N.V. (NYSE:AER) stock. In its Q4 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on AerCap Holdings N.V. (NYSE:AER) stock. AerCap Holdings N.V. (NYSE:AER) is the world’s largest independent aircraft leasing company. The stock is down 49.7% since the Greenlight Capital’s pitch in January 2020, which suggests the investment firm was wrong in its decision. On a year-to-date basis, AerCap Holdings N.V. (NYSE:AER) stock has fallen by 53.8%.
On January 21, 2020, Greenlight Capital had released its Q4 2019 Investor Letter. Greenlight Capital said that AerCap Holdings N.V. (NYSE:AER) stock is poised to grow in 2020. This isn’t the first time Greenlight Capital talked about AerCap favorably either. The investment firm has been a long time AerCap bull. Five years ago we shared Greenlight Capital’s bullish AerCap thesis in this article.
In 2019, the Greenlight Capital Fund recorded a return of 13.8% as compared to 31.5% of the S&P 500 Index.
Let’s take a look at comments made by Greenlight Capital about AerCap Holdings N.V. (NYSE:AER) in the letter.
“AER leases new and mid-life airplanes to airlines globally. AER’s 99%+ utilization rate and 7.5- year average remaining lease term support a high degree of earnings visibility. Additionally, the company is well-managed and a strong capital allocator. Since we invested in the company in 2014, AER has disposed of about 500 planes to improve its fleet age, technology mix and customer concentration, while generating strong gains-on-sale consistent with its conservative carrying values. During this period, the company has delevered, bought back 42% of its shares outstanding and grown book value per share annually by 15%. The shares recovered from a 2018 sell-off and gained 55% in 2019.
In September and November, two smaller peers with inferior platforms and returns on equity agreed to be acquired for 111% and 117% of book value. The suspension of Boeing 737 MAX deliveries since March 2019 and the subsequent recent production halt has reduced global narrow-body deliveries by 50% and structurally strengthened the demand for (and the value of) AER’s airplanes on a multi-year basis. For the last few years, technical overhangs have increased the volatility of AER stock and generally harmed the shares. We believe these issues have been fully resolved and the company is poised for strong economic and equity performance in 2020.”
In Q1 2020, the number of bullish hedge fund positions on AerCap Holdings N.V. (NYSE:AER) stock decreased by about 11% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with AerCap’s growth potential. Our calculations showed that AerCap Holdings N.V. (NYSE:AER) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
