5 Stocks to Buy According to Michael Rothenberg’s Moab Capital

2. Air Transport Services Group Inc. (NASDAQ:ATSG)

Moab Capital’s Stake Value: $2.879 million

Percentage of Moab Capital’s 13F Portfolio: 7.01%

Number of Hedge Fund Holders as of Q3 2021: 23

Air Transport Services Group Inc. (NASDAQ:ATSG) is an Ohio-based aviation holding company. The company deals with air cargo transportation domestically and internationally.

Announced in November, the company’s Q3 revenue was $465.9 million, which demonstrated year-over-year growth of 15.3% and beat consensus forecasts by $28.6 million. Similarly, the Q3 EPS of $0.6 crossed estimates by $0.14.

Based on data about the 873 hedge funds tracked by Insider Monkey, Gregg J. Powers’ Private Capital Management is the largest institutional shareholder of Air Transport Services Group Inc. (NASDAQ:ATSG), with shares worth $21 million by the end of Q3 2021. Additionally, 23 hedge funds on Insider Monkey’s database have stakes in the company as of Q3, compared with 19 in the previous quarter. The total value of these stakes is over $117 million.

Bernzott Capital Advisors published its “US Small Cap Value Fund” second-quarter 2021 investor letter in which it mentioned Air Transport Services Group Inc. (NASDAQ:ATSG) and shared insights about the company. Here is what the investor letter said:

“Air Transportation Services (ATSG): Demand for the company’s leased air freighters for time-definite transportation networks has been jumpstarted in recent years by e-commerce growth. The company’s order book is its strongest ever, with contract terms lengthening in some cases. This provides excellent long-term visibility with a more stable earnings profile than other transportation companies. The prospects for significant cash flow growth are bright. The company operates roughly half of Amazon’s freighters, and Amazon owns 19.5% of the company. DHL is also a significant, long-term customer. The Department of Defense is the company’s largest customer, as ATSG handles both passengers and freight for the military. This business, along with a smaller passenger charter operation, should stabilize in 2021 after pandemic-induced weakness, and shift to a tailwind in 2022. ATSG trades at just 7x EV/EBITDA and offers attractive upside potential.”