What Makes FTAI Aviation Ltd. (FTAI) a Good Investment?

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. Investor sentiment at the beginning of 2025 was positive. In 2024, US equities once again outperformed their global counterparts, and there was optimism that the new Republican administration would strengthen the idea of US exceptionalism. However, the first quarter did not meet those expectations. In the quarter, its Investor Class fund ARTSX returned -10.14%, Advisor Class fund APDSX posted a return of -10.10%, and Institutional Class fund APHSX returned -10.07%, compared to a return of -11.12% for the Russell 2000 Growth Index. Markets experienced weakness due to rising fiscal and geopolitical uncertainties during the quarter. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2025.

In its first-quarter 2025 investor letter, Artisan Small Cap Fund highlighted stocks such as FTAI Aviation Ltd. (NASDAQ:FTAI). FTAI Aviation Ltd. (NASDAQ:FTAI) owns and acquires aviation equipment for the transportation of goods and services. The one-month return of FTAI Aviation Ltd. (NASDAQ:FTAI) was 11.42%, and its shares gained 53.88% of their value over the last 52 weeks. On June 2, 2025, FTAI Aviation Ltd. (NASDAQ:FTAI) stock closed at $120.35 per share with a market capitalization of $12.343 billion.

Artisan Small Cap Fund stated the following regarding FTAI Aviation Ltd. (NASDAQ:FTAI) in its Q1 2025 investor letter:

“Three of those new GardenSM positions were FTAI Aviation Ltd. (NASDAQ:FTAI), Aris Water Solutions and Sweetgreen. FTAI started as a leasing company focused on narrow-body aircraft and engines. A few years ago, the company launched the engine module exchange program; it repairs used engines and modules and then offers them for exchange or sale. The exchange program is expected to become the majority of the company(from a 100% leasing company in 2021). The company has in-house maintenance and repair capabilities and an inventory of prebuilt engines and modules, enabling an engine or module exchange in 7 to 15 days versus repairs that can take up to 100 days. We believe its exclusive focus on CFM56 and V2500 engines, which power Boeing 737s and Airbus A320s(more than 90% of the global narrow-body fleet), reduces operational complexity and enables significant internal operational efficiency. And last, it formed a joint venture with Chromalloy to develop FAA-approved alternative aircraft parts (Parts Manufacturer Approval) that are functionally equivalent to the original equipment manufacturer parts. Two of its five parts have already received FAA approval. We expect the parts to reduce repair costs significantly and potentially expand margins meaningfully.”

FTAI Aviation Ltd. (FTAI): Among Billionaire Quants’ Two Sigma’s 10 Stock Picks with Huge Upside Potential

A team of airline employees surrounded by flight deck controls, with a variety of aircraft outside.

FTAI Aviation Ltd. (NASDAQ:FTAI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held FTAI Aviation Ltd. (NASDAQ:FTAI) at the end of the first quarter, which was 54 in the previous quarter. While we acknowledge the potential of FTAI Aviation Ltd. (NASDAQ:FTAI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered FTAI Aviation Ltd. (NASDAQ:FTAI) and shared Two Sigma’s stock picks with huge upside potential. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.