When reviewing the financial news I, like many others, usually look for one of three things; a stock that has significant growth prospects, but is priced on a reasonable multiple, a stock that is priced on a low valuation compared to earnings or book value, or a stock that has seen recent notable insider purchases. Three stocks that have caught my notice this week are Air Lease Corporation (NYSE:AL), World Acceptance Corp. (NASDAQ:WRLD) and Pacific Premier Bancorp Inc. (NASDAQ:PPBI)
Air Lease Corporation is a company that leases jet aircraft to airlines worldwide. It is priced on a PE multiple of just over 20, but has seen earnings growth of 77% over the past two years and consensus EPS forecasts point to annual growth of 29% over the next five years. The company was set up by Steven Udvar-Hazy, who has worked in the airline business since fleeing the Soviet occupation of Hungary in 1958. In 1973, Mr Udvar-Hazy co-founded International Lease Finance Corporation, which he sold to AIG (NYSE:AIG) in 1990, although he remained as CEO until 2010, growing the business into the world's largest aircraft lessor. After retiring from ILFC, Mr Udvar-Hazy set up Air Lease Corporation, offering leasing services to the largest airlines, including United Continental (NYSE:UAL), British Airways (OTC:BAIRY), Emirates and KLM (OTC:KLMR). The company has grown rapidly, and now owns 146 single-aisle and 31 twin-aisle jet aircraft, as well as 16 turboprop aircraft. Airline customers benefit from tax benefits, as well as cheap access to capital and improved flexibility over owning the assets. Trading on a forward PE of 16.1 and PEG of 0.69, Air Lease looks interesting for investors seeking growth at a reasonable price.
There is possible value in World Acceptance Corp., as the company is trading with a PE of 8.37 with consensus earnings forecasts pointing to annual growth of 15% over the next five years. World Acceptance Corp. is a payday lender offering short-term loans at high rates of interest. Some concerns surround the industry about possible changes in regulation, including the introduction of interest rate caps by the Consumer Financial Protection Bureau. The concerns have hit valuations, but lenders argue that short-term loans are competitive, with many credit card offerings and can save borrowers money by helping them to avoid unauthorised overdraft charges and fees. Since 2005, the company has grown revenues from $206 million to $596 million and net income from $34 million to $106 million. Consensus EPS forecasts for 2015 and 2016 are $10.85 and $11.77. Priced on a forward PE of 6.47 might make World Acceptance Corp. interesting for value investors.
Finally, eight insiders made purchases of Pacific Premier Bancorp as the company finalizes its acquisition of Infinity Franchise Holdings and reports a 33% increase in net income. Steven R. Gardner, president and chief executive officer, who added $142,000 of stock to his holding, commented:
The $78.8 million in loans added through the acquisition provides us with attractive risk-adjusted yields.
Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high-risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC registered investment adviser prior to making any investment decisions.
Disclosure: The author holds no positions in any of the stocks mentioned, nor has any intentions to initiate any in the next 72 hours.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.