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Aircastle LTD Message Board

  • r_venturi r_venturi May 22, 2008 10:25 AM Flag

    Company BuyBack Coming ...

    It's clear at these prices we will not get a dividend increase but instead the company will keep the divi at $.25 and announce a decent size buyback, probably on the order of 5 million shares ...

    This is not a dividend play for the time being but a growth story, at least until the stock price truly reflects the value of the underlying assets

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    • Company will suspend the dividend ... you heard it here first ...

      The normal dividend payout will be allocated toward an ongoing buyback as it should be!!

      The shares are way to low to issue new equity for plane aquisition purposes and the share price far from represents the underlying equity in the planes already owned.

      This will be a huge positive for the stock and will move it to the low 20's within a few months ...

      The dividend will come back once the company feels the stock price represents fair value as well as an attractive price level to issue more stock for additional plane purchases

      • 1 Reply to r_venturi
      • Warlord,
        I dont know why you keep mentioning 'autos',CIT financial is not a player in auto leasing.
        (not a big player to my knowledge)
        It is a 98 years old equipment leasing company until 4 years ago when they hired a guy from Wall Street.
        I am not going to bore you with CIT leasing,but people are watching CIT keenly as what happens to CIT makes other lessors and lenders to leasing companies 'uneasy'.
        All that you said about AYR are already figured in the stock price of AYR,AER,FLY,GLS-young fleet,fuel efficient fleet,lessors do not operate airplanes and do not purchase jet fuel,Dubai money,emerging markets etc etc.
        But the fact is that despite all these ,their stock price are not going up,in fact AYR has been drifting down everytime I look.
        BTW,airlines now have to pay cash for jet fuel,no more fly now pay 14,21 days later.
        It has already happened in Europe,they dont need another SWISSAIR,and now the US airlines have to do the same,CASH ONLY!
        (You must have heard of Frontier Airlines and they filed for bankruptcy as First Data is holding back their credit card proceeds).
        The credit crunch may not be over,if more bad news come out of the banking sector-auto loans,credit card loans,equity line loans and more mortgage fallout hit next quarter earnings.
        Also this study they are doing now on Libor rate which they think 4 out of 16 banks are under reporting the rate they paid.
        If they all tell the truth ,libor may head higher which means higher borrowing cost for business.
        I have seen small company borrow at libor plus 600 basis points,Lord helps them if libor goes up and business goes down.
        As if this is not enough for these slimy pathetic bankers,the mortgages they securitised and sold to investors non recourse,there are clauses which state if these mortgages default too soon or there is fraud or mistakes involved or simply do not belong in the tranche ,they should be returned to the issuers.
        Even Fannie is looking at the default loans one by one and asking why?
        So get your pop corn and grab a front seat,the show is not over yet.
        Back to AYR,I think they are aware of what is going on around them,it is only prudent for them not to raise dividend or buy back shares but conserve cash.
        This is what I see and if you were running AYR,you would be doing the same-hunker down and conserve cash.

    • I doubt it,leasing company needs to borrow money and credit is tight.
      Take a look at CIT Financial,its rating got downgraded and cannot raise money in commercial papers,so it is scrambling to issue more shares (which is dilutive to existing shareholders),sell assets and pulled all its lines of credits.
      CIT recent secondary offering at 11 dollars a share is devastating to its shareholders,CIT was one time a 60 dollars stock.

      • 1 Reply to janetinrichmond
      • I disagree - for starters CIT is a very different company than AYR. Airplanes and cars are very different as well :)

        I don't think there will be a 5m share buyback, but I do think there is ample room to go down this road of thought. I would expect more along the lines of 1-2m shares repurchased.

        As for money - AYR has all the money it needs for most of this year and I expect they will announce re-fi on the december balance in this or next quarter.

        Janet - remember this is an international company :) You might be making the wrong play if I read your recent several posts correctly. A few thoughts for you to consider:

        1) AYR does not buy fuel - and you don't rent an airplane for a weekend. You rent them for years at a time. AYR's planes are among the most fuel efficient in the world and while US plane travel may decline, most of the rest of the world (see client list) has the opposite problem. Recent quarterly: 2009 planes coming off of lease are already nearly all re-leased. 2010 leases will start this quarter. Doesn't sound like a pullback.
        2) When you purchase a Boeing 737, it immediately is worth 10% more. You read that right. Not like those cars that lose more than 10% of value in their first year. Planes are worth more because the backlog of orders for Boeing is more than 10 years long. Even if a few pull back orders from aircraft manufacturers, it's not ten years worth.

        As for CIT, I'm certainly watching that one with interest as I have a friend in CIT-A premium shares. It has very little to do with much else at the time.

        IMHO the credit crunch is over. Bear went down and that was a big thing. That said, AYR can get money from Dubai, and just got nearly a BILLION dollar line from a US bank right after Bear went down. Airplane assets, even fully depreciated ones, can be sold at a premium right now, and book value on this stock is at least $16. Debt doesn't matter unless you're illiquid, and there's the other side of the equation: assets. Nearly every company has some debt.

        Greater than 1B in assets over 78 million shares... it's good math for investors. Add that $26 a share is not unrealistic (see earlier posts for this number).

        Those who know me here know I watch as a chartist as well. While I'm an investor (not trader) it helps to understand how others see the market. We just hit double bottom (pattern-recognition= market reverses direction toward 'upward' direction) and we still have a large seller getting out at sixteen with support in the high 11s.

        I expect it to trade between that range until dividend announcement, circa two to three weeks. I've moved from hold to buy and added another 13% at these prices. I'll take a bet on that, as I already have bet with money :)

        Cheers all, and time will tell.

 
AYR
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