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Strategies & Market Trends : Value Investing

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To: James Clarke who wrote (29234)12/17/2007 11:13:27 PM
From: Paul Senior  Read Replies (2) of 72242
The aircraft lease stocks right now would be my favorites going into 2008. See article by Markham in rllee post.

As is the way I prefer to operate, I am building a position in a package of these. Specifically I've been buying GLS and to a lesser extent (so far), AYR.

The demand for aircraft apparently is still strong. Perhaps only a world recession will diminish it. (I am guessing and presuming here without real fact backup.) These companies seem to be able to get their funds for financing. Their customers are a diverse lot so the risk of a disastrous customer default (i.e. returning the planes before contract expires) is diffused.

Basically I'm looking for aircraft demand to continue, and the earnings (and dividends) of the companies to increase. While waiting, both companies provide a dividend yield over 10%. (And AYR just raised its dividend.) Consequently I am looking for a total return consisting of capital gain and dividend yield. The capital gain could come from investors bidding up the stock for it high dividend yield, growth in earnings, or some other factor(s).

Some caveats.

"favorite going into 2008". I'm looking to buy now through maybe early 2008. I'm not expecting results in 2008. With these stocks - as with many others I am buying - I am planting now with a view for harvesting in 2009/2010.

My "favorites". Generally my latest buys. For me, there's no relationship between "favorite" and "best performance". Sometimes my "favorites" work out; sometimes they do not. My best performers have always been stocks that were a surprise to me, and if I remember right, have never been my favorites at the time I bought them.

"for it's high dividend yield". I considered 8% high several weeks ago; now many of my stocks are at 10%, several 12%. So it's quite possible selling in AYR, GLS might continue and could drive their "high yield" even much higher.
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