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Aircastle LTD Message Board

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  • warlord_shea warlord_shea May 29, 2008 10:48 PM Flag

    Investor Lawsuite Coming ...

    REITs and REIT style companies tend to carry debt more heavily as it is a part of how the model works. Out of curiosity I went ahead and compiled the debt numbers for "the big four" in this sector:

    Debt Assets Debt%
    AER 3.6b 4.6b 78
    AYR 3.3b 4.5b 73
    FLY 1.4b 1.9b 73
    GLS 1.1b 1.6b 68

    Given the model and sector I think the debt is in line. Though 3.3b sounds like a lot of money, as a percentage it is where it should be compared to competitors. If all assets were sold outright even at a discount due to on-the-book depreciation, there would be a book value of 1.1b over 73m shares meaning $16 to $26 (see Goldman Sachs recent valuation for AYR) outlay.

    So the numbers look big to us but not in context. A leading fortune 500 company has 135 billion in liabilities. They also have 123 in equity and are trading like gangbusters. See XOM :) You can have great debt and still maintain great value in the marketplace.

    At any rate, it was a good thought exercise.

    Upgrading position from buy to strong buy pending announcement in 2 weeks. Moved from adding 13% to adding 35% at today's low. Dollar costed to about $17.00.

    Cheers all,


20.06-1.55(-7.17%)Jun 24 4:04 PMEDT