Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

FLY Leasing Still Trying To Close Its ROE Gap

Within the world of aircraft lessors FLY Leasing (NYSE:FLY) remains a more challenging investment prospect. Not only is FLY Leasing quite a bit smaller than AerCap (NYSE:AER), Air Lease (NYSE:AL), AWAS, and Aircastle (NYSE:AYR), its margins, ROE, and credit quality are all lower. Management has succeeded in boosting utilization to 100% and is continuing to expand the fleet as air travel demand increases, but Wall Street still seems rather skeptical regarding the company's real asset value and the likelihood that the company can achieve double-digit ROEs.

While I don't think FLY Leasing is ever going to generate results on par with AerCap or Air Lease, and I do have some concerns...

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