The lessors have been undervalued for a long time in most ways to measure them. 4$ earnings p/e of 10 gives 40 dollar price. If it carries the P/E of air lease it will be higher. I am betting that this will bring attention to the other leasing companies.
On another note this is an example of where following the general wisdom of not concentrating in a sector has hurt me. As leasing got to be such a large part of my portfolio - even though I felt very comfortable with it - much more then most others- I lightened up as they rose. Is it better to be concentrated in a sector that you feel comfortable with or diversified in some that can't seem to compare to the one that you are in.
I can't just shove my money under a mattress - since I don't get a pension - I need some kind of income from my bundle of money over time.
As far as FLY - I agree a 20% return from here over the next year is very likely and the AER movement and the value of ILFC shows some of the real value of FLY and AYR which should show up over time.
Strum - I did similiar to you - but did hold a core of AER but nowhere near what I had at one point. Multiple times I have sold the higher priced of the AER, AYR and FLY and up to this one always made out. However - this one is killing me for the loss of potential gain. Since I am also considering retiring in January - was gravitating towards the divi stocks anyway. However this would have been a nice retirement party holding a lot of AER. I still have hopes for FLY since it is my largest holding of the 3. My largest holding is cash anyway which is turning out to be a bad move also! My cash account is almost all cash because I am trying to buy a house or land(and build a house) in a town called Westport Ma,(near the ocean) without selling my present house for now. Being retired I can fix my present house up and sell it for top dollar.
So you think it is time to unload??? I am raising cash but haven't sold any FLY. Have sold 50% of my OHI. Sold some of my PFDS. Stupidly kept some of my PFDS and they have gotten killed the last few days. Hoping that government continues its bond buying to spike those PFDS' back up. Feeling pretty bad that I sold some AER and AYR to buy more FLY.
6.75% is going to seem really cheap over the coming months and years. Good until 2020. They will be able to buy these back at half price in 5 years. Having money borrowed unsecured - allows them to borrow money secured by the panes at a cheaper rates. I have been waiting for them to do this - surprised it wasn't more money. Why do they need all this money???? Maybe a piece of a deal with AER for ILFC.
We all know that interest rates are being held down artificially by the government. The effect of this is to drive down yields of financial instruments(and driving the price of the instruments to make the yield lower). As the government stops is Bond buying program it will have the effect of allowing rates to go back to where they naturally should be. If going rates double the value of the instruments is cut in half. The problem with stocks like OHI is they are not the same as fixed rate instruments, As the underlying buildings gain value for inflation and a stronger economy and stronger demand they can raise rents which allows them to pay higher
dividends softening some of the damage from rising interest rates. They also have fixed rate mortgages that are not effected by rising rates. It does seem that rising rates are going to effect OHI much more then they should but it seems like they will. How fast rates in general rise is a good question and will have a lot on what the PPS of OHI is over the coming 2 years. We also have a limited number of instruments that baby boomers can buy for dependable income- especially those that can rise over time. Dennis Gartment predicts we have 10 years of interest rates rising will the rise fast enough to negate the divi's
coming from OHI. OHI has gone from 33 to 30's in a matter of days because of the ending the bond buying program. Should this prove false we may gain back some of the losses. The price of OHI right or wrong is
tied to the Government actions as the head into territory where no one really knows that effects or the speed of the effects.
I was not in favor SO but now that it is done and no large deal is obviously in the books - they must feel that having the flexibility of adding a few airplanes here and there each quarter was worth selling shares at such a low price. I do prefer that they be picky and not take every deal - but I also hope to see that their actions get them closer to AYR and AER in PPS. Hopefully with this quarter out of the way - we should see some progress over the next 3 months.
I am supposed to be buying at today's dip because of the lower earnings. Maybe dividend news is
overshadowing the earnings. We should be back to 18 or 19 based on AYR and AER. They have
200 million in unrestricted cash - have improved the debt coverage allowing them to acquire more planes.
However they still need to acquire enough planes at an attractive return to make up for the floating of the shares at 14. Hard to buy at 15 when I planned on buying at 14. Did anyone see the ACF(or FFO). It used to be advertised now I have to hunt for it.
I have raised some cash to buy on a dip. I already have a lot - and expect long term for FLY to catch its competitors as it upgrades it's fleet. Even if their earnings are not great - their cash flow will be very good for a 14 dollars stock. My expectation is a 30% gain in hte next year plus divi's. Not a lot of stocks that I expect that to happen from the levels that they are at.
Obama is a great politician but a terrible president/leader. His roots as a community organizer who was dependent on government money ruined him forever. His whole idea is how to get more money and really thinks government can spend money more eficiently then private enterprise.
Obama's whole idea is how to fleece more people out of their savings. The elderly don't even know it but he is screwing them every day as they can't get anything on their savings but not in a position to risk it in the market. My dad should be getting 5k a year on his measily 100k savings but gets virtually none. Retirees voted for him and don't evern realize that he picks their pocket every day to push his policies. A train wreck is coming when the government takes the losses on all those mortgages they own as interest rates rise and the value plumets. A trillion dollars worth of mortgages losing half or more of their vale - how is the government going to hide this??