Founder of the value oriented hedge fund M.D. Sass, Martin Sass is bullish on American Airlines Group Inc (NASDAQ:AAL), Realogy Holdings Corp (NYSE:RLGY), and Northstar Realty Finance Corp. (NYSE:NRF). With Realogy Holdings Corp (NYSE:RLGY) and Northstar Realty Finance Corp (NYSE:NRF), Sass is making a bet on the recovery of U.S. housing market and according to him American Airlines Group Inc (NASDAQ:AAL) is relatively undervalued to its peers. Sass discussed his top stock picks on TheStreet, recently.
“Northstar Realty Finance Corp. (NYSE:NRF) is a company that is growing rapidly in its own real estate portfolio. The healthcare portion, tripled with an acquisition they announced last week of Griffin American Healthcare, took their asset from $1.6 to $5 billion in the healthcare sector. That sector trades at about 5% yield, they also have a total portfolio of real estate that accounts for about 75% of their 12 billion in assets. This company, I believe, will spin out the healthcare portfolio if it’s not recognized in the marketplace, because the yield is priced as if it was a mortgage read and it’s really 75% equity read today,” Sass said.
Realogy Holdings Corp (NYSE:RLGY) is down 19% year to date and in its second quarter earnings were down 19% year on year, still Sass likes the stock. He feels the recent decline reflects the stalling in the U.S. housing recovery. According to Sass Realogy Holdings Corp (NYSE:RLGY) is the best leveraged way to play the U.S. housing market and house prices as the company is the biggest U.S. real estate brokerage firm and owns the top brands in that space.
” I originally bought it [American Airlines Group Inc (NASDAQ:AAL)] at $18, when it was U.S. Air. However, I bought more of American Airlines Group Inc (NASDAQ:AAL) recently. The stock went down 12% after their earnings report on some fluky issues related to Latin America, Venenzula. The big picture is, I think, the earnings are going to vastly beat Wall Street expectations,” Sass added.