Heavy Insider Buying Activity at Aircastle

Insider buying activity: Over the past week, Marubeni Corporation, which acts as a Director of Aircastle Limited (NYSE:AYR), acquired 150,000 shares of common stock. After increasing its stake in the firm to 13,937,100 shares last week, the insider purchased an additional 30,000 shares this Tuesday, at $17.67 each. Marubeni now holds approximately 14,057,100 shares, or $ 247,123,818 worth of stock.

The Marubeni Corporation’s first purchase of Aircastle’s stock occurred on July 12^th this year, when the company purchased 12,320,000 common shares of common stock at $17 per share. This transaction cost the firm approximately $209 million. With the acquisition of more than 1.5 million shares over the past few months, Marubeni has been increasing its position in Aircastle significantly.

The insider trading at Aircastle however, has seen stock prices lose value. When Marubeni purchased 30,000 shares last Friday, the stock was valued at $17.85, which means a 1% drop since the beginning of the week. Nevertheless, Aircastle is still trading at values near its 52-week-high. And, at 30.3 times its trailing earnings, the stock entails an 80% price premium relative to the industry average.

Large hedge funds also have a stake in Aircastle, such as Hirzel Capital Management with 1,533,775 shares, and Goodnow Investment Group holds 1,999,871 shares of common stock. In addition to these hedge funds, Dreman Value Management holds over $29 million worth of the stock.

The second quarter of 2013 saw Aircastle’s adjusted EBITDA rise to $183.4 million, up 17% from the same quarter last year. Net income also increased relative to 2012, up $16.5 million to $32.9 million.  Aircraft sales and lower impairment charges are the primary reasons for this growth.

Disclosure: Pablo Erbar holds no position in any stocks mentioned

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