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Long/short equity, deep value, event-driven, macro

Air Lease: Leverage Backed Growth To Continue

Air Lease (NYSE:AL), which is in the business of aircraft leasing, has exhibited stellar revenue and EBITDA growth (backed by debt funding) since its inception in 2010.

This investment thesis discusses the likelihood of leverage driven growth over the next few years. Also, the current valuations are discussed.

The arguments provided below culminate to the point that Air Lease is a significantly undervalued stock with a current PEG ratio of 0.51 and a forward PE (FY14) of 11.6. Further, the company has high growth potential over the long-term considering the current 10-year capital expenditure plan and its incremental impact on revenue and operating cash flows.

Current Aircraft Fleet And Geographical Diversification

As of December 31, 2012, the company...

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