do... You should have received an Information Statement about 18 months ago that indicated ENTP had reached agreement with the Hartford Insurance Companies to liquidate operations. The inference was that ENTP would make a final cash distribution. While it is not a "donedeal" you should expect this to happen.
Bob, We must be getting closer to the final distribution, etc.
This morning, the bid/ask was as tight as I have ever seen at bid $1.06/ask $1.07 per share.
I believe that there may be some speculation that the final distribution could be higher than the present bid/ask.
My take is that Boeing is not like Saudi Arabia (maintain market share, or increase it, by cutting prices (on crude oil)). In my entire life, I have never seen Exxon Mobil be so price competitive with the gasoline discounters as they are currently--they must be getting a lot of extra crude at below world market prices from the Saudis and are taking market share.
Boeing and Airbus will instead cut production rates. If the two OEMs need to move extra units, it will be the aircraft leasing companies (including AER) that will benefit, as they generally take advantage of any "extra production." They are opportunistic buyers and will get the best deals.
Delta's Anderson says he will buy used wide bodies for a bargain, and Boeing will reduce prices on new wide bodies to compete. He says that the price pressure will eventually extend to narrow bodies. Boeing and the aircraft leasing companies dropped today. Anderson "likes" used aircraft (e.g. B717-200's (former AirTran)). Who knows what the right answer is. Could be another opportunity to buy AER. Q3 earnings for AER should be outstanding!!
I believe that September traffic will surprise to the up side. The labor day holiday this year was Sept 7 vs. Sept 1 last year. As a result, probably half of the holiday travel fell in August last year. I don't think that the market sees this year vs. year effect. I will not be surprised if LUV rpm's for September are up by more than 8%.
Take a look at auto sales (reported yesterday), which had a major pop this September, as the labor day weekend is a significant shopping period for auto buyers.
This sale demonstrates the continuing successful implementation of the AER strategy. Sell off older aircraft at a profit; invest in new aircraft; build commercial relationships to manage aircraft for others, etc. I would guess a margin of around $40 to $50 million on this sale of $600 million.
My experience in this business is that a lot of these types of opportunities get closed near the end of a quarter.
I added shares of this at $2.56 on Dec 17, 2008, and it worked out just fine. GE running a huge financial business by using commercial paper (without back up lines of credit) would have gone bankrupt in early 2009 if not for the U.S.Treasury Dept. The market tarred AER with the same brush, a huge mis-pricing.
That bard knows nothing about aircraft and engine leasing, trading and management. I am convinced that AER is way undervalued. Now is a great time to add to positions.
BAC/Merrill Lynch has upgraded to buy from hold.
They lowered the price target to $55 from $56. Where is the logic in that? Dropping the price target by $1 communicates a level of precision that does not exist.