We recently published a list of Jim Cramer October Portfolio: Top 10 Stocks to Buy and Sell. Since FTAI Aviation Ltd (NASDAQ:FTAI) ranks 8th on the list, it deserves a deeper look.
Jim Cramer in a latest program commented on the latest stronger-than-expected jobs report, calling it “good news” and expressed surprise at how the stocks “roared” on the report.
“For years, we have been taught that when buying yields go up, stocks go down. Ever since the Fed gave us that double rate cut last month, we have been afraid that they have been acting so decisively. Something might be wrong with the economy—something they knew about, but we didn’t.”
Jim Cramer was also surprised by bank stock gains. He said that these stocks probably rose because a strong employment situation means fewer bad loans. Cramer also said we might be heading to “no landing at all.”
“People have a collective sigh of relief that we weren’t headed for a crash landing. They held onto their stocks with both hands.”
For this article we watched several latest programs of Jim Cramer and picked 10 stocks he’s talking about. With each company we have mentioned its number of hedge fund investors. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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FTAI Aviation Ltd (NASDAQ:FTAI)
Number of Hedge Fund Investors: 33
Jim Cramer was recently asked about FTAI Aviation in a latest program on CNBC. Here was his response:
“That stock is too hot for me. I would prefer to be in RTX. I think it is a better buy. I understand this is a momentum stock. I’m not going to say people don’t play it, but it is too expensive for me.”
FTAI Aviation Ltd (NASDAQ:FTAI) specializes in owning, leasing, and managing aviation equipment, such as aircraft and engines, as well as offshore energy equipment, supporting global transportation of goods and people.
FTAI shares have gained a whopping 300% over the past year, hence the concerns about its valuation. Boeing and Airbus are falling behind on delivery schedules, driving demand for aftermarket services to keep older planes flying. This puts pressure on the engine supply chain, which is where FTAI Aviation excels. The company focuses on leasing and manufacturing parts for the CFM56 and V2500 engines used in Boeing 737s and Airbus A320s, while also gaining exposure to wide-body aircraft.
FTAI Aviation Ltd (NASDAQ:FTAI) has raised its 2024 EBITDA target from $675-$725 million to $825-$850 million, with its 2026 goal increased to $1.25 billion. The company’s growth phase, driven by demand for its engine pools, continues, though it is expected to shift focus to shareholder returns in the future. FTAI’s current high leverage and stock price suggest a stretched valuation.
Columbia Acorn Fund stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q2 2024 investor letter:
“FTAI Aviation Ltd. (NASDAQ:FTAI) is an aviation leasing, maintenance and repair company that has built a unique business model, with exposure to the most attractive part of the aerospace aftermarket today — the CFM56 jet engine (sole-sourced engine for the Boeing 737 family and one of the two engine options for the Airbus A320 family). CFM56 engines are the largest engine market, with more than 22,000 engines manufactured and more than 21,000 in service today. FTAI’s strategic partnerships with Lockheed Martin and other engine manufacturers provide a significant moat. The company is well positioned to take advantage of the utilization of engine leasing assets due to strong demand, as airline traffic continues to pick up amid asset scarcity.”
Overall, FTAI Aviation Ltd (NASDAQ:FTAI) ranks 8th on Insider Monkey’s list titled Jim Cramer October Portfolio: Top 10 Stocks to Buy and Sell. While we acknowledge the potential of FTAI Aviation Ltd (NASDAQ:FTAI), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FTAI 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.