Good Point about the depreciation of values. I understand this. However, AL says they only want to keep 200 planes in the rental inventory and sell off the planes and buy newer ones through time. This should limit the loss of value and also keep the sale-ability of the planes they sell while keeping the fleet age new.
I disagree. There is 5.47B in debt, which on the surface looks high. However, that is the nature of a leasing business. You borrow to buy inventory, and then rent out the inventory. If you look further, they have 6.25B in Assets, mostly in planes. Also, if you are worried about rising interest, they have been refinancing and locking in lower rates. They also have young planes and contracts that go for several years. They are expanding by 25 percent per year too. Meanwhile, I think the management stated that their lease contracts are set in a way to alleviate any pressure that could be caused by higher rates.
Think of it this way, when you buy a house, you have debt that is large. If you bought property to rent to others, you would probably finance that too!
If you don't like relatively high debt levels, then a leasing company is not the way to go, all leasing companies have high debt. That is this nature of the business.
I got in around the same time as you. I found the stock on Kiplinger Letter. Around 15 yrs ago I had a company called Scientific Leasing that rented Aircraft like Air Lease and liked the company, until it got taken over. Due to my past experience, I wanted another company like them and think AL is the one. I like the mgmt. and their goals better than their competition.
If you read the article, it is based on a Point and Figure chart with default settings. Their analysis was done blindly using default settings. If any of the default settings are changed, such as changing the Reversal to either 4 or 2 blocks instead of the 3 default, give a value very different from the default. Using a 4 block reversal gives a target of 32.5 and using a 2 block reversal gives 26. Also changing to percentage from the default block size also changes the values. In Conclusion, the values using the default chart are sort of cherry picked for the worst value possible.