Atlas Air: 4x Owner Earnings: Aggressive Repurchases Warranted
- Atlas Air is trading at $850M market cap, a steep discount to tangible book value near $1.26B.
- Atlas has averaged $200M in annual Buffett style "owner earnings" over the past 4 years, but trades at a multiple of about 4 times those earnings.
- Recent large "growth capex" spending via the purchase of new 747-8 and 777 airplanes seems to have slowed and may free up significant capital to return to shareholders.
- $60M in buyback authorization remains for this year (~7% of current market cap) and the company has started buying back shares in this quarter according to a recent presentation.
- A test for management will be whether it recognizes the steep discount its shares currently trade at by aggressively repurchasing shares.