Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

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.

Aircastle Limited (NYSE:AYR)

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

Recommended Reading:

The Wendy’s Co (WEN)’s Senior Vice President Bets On The Company’s Long-Term Growth

Five of The Most Important Insider Buys During November

Griffon Corporation (GFF)’s CEO Buys Twice During a Week

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.