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Steven Reiman  

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  • Aircastle: The Value Investor Of Aircraft Leasing [View article]
    Ryan,

    For the most part Aircastle buys used planes, not new ones. They got into trouble buy getting into long term contracts to buy new planes from Airbus during the financial crisis. Buying used planes allows Aircastle to capitalize on its strength in senior management and its ability to uncover value.

    The reason Aircastle is trying to move away from narrow bodies is due to the very fact you cited. The new planes that Boeing and Airbus are developing will increase the obsolescence rate of current narrow bodies. Therefore, any plane lessor with a large exposure to narrow bodies in their portfolio has an outsized exposure to obsolescence risk. This is the risk that Aircastle is trying to avoid.

    Steve
    Feb 15, 2013. 07:12 PM | Likes Like |Link to Comment
  • Aircastle: The Value Investor Of Aircraft Leasing [View article]
    D/E-This is a finance company, leverage is needed

    Beta-Useless metric for valuing stocks from a value investing standpoint

    Negative Cash Flow-Which cash flow are you referring to? Operating? Total? They have been buying planes which would result in negative cash flow.

    EPS -This includes unusual items (write downs on planes) that should be non-repeating.

    Fortress-Sold out of their position

    Airline Industry-Could go up or down based on worldwide growth. Long term lease contracts and risk management should hopefully mitigate this issue.
    Dec 20, 2012. 11:14 AM | 2 Likes Like |Link to Comment
  • Aircastle: The Value Investor Of Aircraft Leasing [View article]
    Liquidity is becoming less and less risky as the company works to extend its debt maturities by refinancing with unsecured debt.

    I disagree on your point regarding buying back debt-aircraft leasing companies need to keep a certain amount of leverage to stay competitive, otherwise the return on equity would not be worthwhile.
    Dec 19, 2012. 07:47 PM | Likes Like |Link to Comment
  • Aircastle: The Value Investor Of Aircraft Leasing [View article]
    The unsecured loans issued in the spring were at little over a 7% blended rate and were used to refinance a term financing (secured) that was floating rate based off libor and was at 2.03% in the Spring.

    However, it is again important to note that the secured loan entailed keeping a certain amount of cash on the balance sheet so the actual "true cost" of the loan was certainly higher than 2%. The company would have had to refinance the term financing by June 2013.
    Dec 19, 2012. 07:45 PM | Likes Like |Link to Comment
  • Aircastle: The Value Investor Of Aircraft Leasing [View article]
    You are correct this article spent a bit of time in queue. I try not to time my investments to squeeze out a bit more yield as this usually ends with me missing the boat on the company entirely.
    Dec 19, 2012. 07:41 PM | 1 Like Like |Link to Comment
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