O’keefe Stevens Advisory, an investment advisory firm, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In 2023, the fund’s largest position, Nvidia (NVDA), experienced a 200% increase as AI became more widely used. Despite cautious comments from analysts and management, the market, particularly in technology, had an exceptional year. The firm anticipated a lower-than-average return year after analyzing several conference calls with similar themes. Setting a low bar can lead to better-than-expected results. In addition, please check the fund’s top five holdings to know its best picks in 2023.
O’keefe Stevens Advisory featured stocks such as AerCap Holdings N.V. (NYSE:AER) in the fourth quarter 2023 investor letter. Headquartered in Dublin, Ireland, AerCap Holdings N.V. (NYSE:AER) engages in the lease, financing, sale, and management of flight equipment. On January 26, 2024, AerCap Holdings N.V. (NYSE:AER) stock closed at $77.82 per share. One-month return of AerCap Holdings N.V. (NYSE:AER) was 4.71%, and its shares gained 23.92% of their value over the last 52 weeks. AerCap Holdings N.V. (NYSE:AER) has a market capitalization of $15.74 billion.
O’keefe Stevens Advisory stated the following regarding AerCap Holdings N.V. (NYSE:AER) in its fourth quarter 2023 investor letter:
“Top picks for 2024 – Five Point Holdings, LLC (FPH) (FPH) and AerCap Holdings N.V. (NYSE:AER). Both situations are similar, with significant overhangs resolved in late 2023. Aercap acquired GECAS in 2021 for cash and stock. GE consistently sold their AER shares, creating heavy selling pressure. In addition, Aercaps planes on lease to Russian airlines were written off in 2022. Thus far, they received $1.2B in insurance recoverables, and ~$2B remains outstanding. Insurance proceeds provide substantial ammunition to aggressively repurchase shares. Ongoing engine and airplane production issues created a “hard market” for secondary transactions. Aercap continually sells planes and engines for over 1.2x carrying value, using proceeds to repurchase stock at or below book value. Note- at a couple of turns of leverage, this ROE is closer to 70%-80%. Repurchasing stock trading at 90% of BV is almost a 100% delta between private market transactions and the stock. That is one hell of a trade! With airlines scrambling for capacity, Aercap holds substantial bargaining power, driving higher rates and longer terms. Business is flying high.”
A commercial airliner being outfitted with pylons and struts, ensuring a safe flight.
AerCap Holdings N.V. (NYSE:AER) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held AerCap Holdings N.V. (NYSE:AER) at the end of third quarter which was 43 in the previous quarter.
We discussed AerCap Holdings N.V. (NYSE:AER) in another article and shared the list of set-it-and-forget-it stocks to buy according to financial media. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
