Marubeni Corporation Continues To Bet Strongly on Aircastle Limited (AYR). But What About Hedge Funds?
Over the past few months, Marubeni Corporation, which acts as a Board Director at Aircastle Limited (NYSE:AYR), has been consistently adding the company´s stock to its portfolio. The purchases started in August, when Marubeni held 12.38 million shares, and continued throughout the rest of the year. After a total of 92 transactions, the Japanese trading company owns more than 15.44 million shares, valued at almost $300 million.
Marubeni currently stands as the largest shareholder at Aircastle Limited (NYSE:AYR), a company that leases and sells high-utility commercial jet aircrafts to private customers and cargo airlines worldwide. We had already reported Marubeni´s heavy insider buying activity at Aircastle Limited (NYSE:AYR) twice in October. However, the issue needed an update.
Since our last coverage of the company, hedge funds filed their third quarter 13F Forms at the U.S. Securities and Exchange Commission, declaring its long positions in major U.S.-traded stocks. Zac Hirzel’s Hirzel Capital Management, the second largest hedge fund bull in terms of stock owned, seems to be trailing Marubeni. The fund increased its holdings by 22% over the quarter, and now owns more than 1.87 million shares, valued at approximately $36 million. This means that Hirzel has 5.5% of his portfolio’s worth placed on Aircastle Limited (NYSE:AYR), still a small bet compared to Marubeni’s or Ontario Teachers Pension Plan Board’s -which owns about 7 million shares.
In addition to Hirzel Capital Management, other hedge funds are betting on Aircastle Limited (NYSE:AYR). Among them we can count Arrowstreet Capital (a new investor), D. E. Shaw, and Steven Cohen’s Sac Capital Advisors –to provide a few examples.
Opposite is the case of all the other hedge funds among the top 7 bulls on Aircastle Limited (NYSE:AYR). Goodnow Investment Group, Legg Mason Capital Management, Dreman Value Management, Aqr Capital Management, Millennium Management, and Two Sigma Advisors, all reduced their stakes in the company over 2013´s third quarter.
However, investors shouldn´t be discouraged by the bearish sentiment. Trading at about 123 times its earnings, most sales must be about profit. The stock is up about 55% year-to-date, and thus, the current valuation doesn´t seem to offer an attractive entry point for investors. However, analysts expect Aircastle Limited (NYSE:AYR) to deliver an average annual EPS growth rate around 29%-30% over the next five years. So, I would recommend keeping an eye on this stock until the valuation drops and an alluring opportunity becomes available. As profitability continues to ameliorate, this company seems poised to outperform the broader industry.
Disclosure: Javier Hasse holds no position in any stocks mentioned