Cash in on Fortress' Investment Prowess

Citigroup, which initiated coverage of Aircastle with a buy rating, points out that while some markets, such as the U.S. and Japan, may start to exhibit maturity characteristics, there are plenty of growth opportunities for the aviation industry in emerging markets such as China, India, Russia and Latin America.

Recent developments include an announcement of a 60-cent dividend, representing a sequential increase of 20%, and a new contract with Airbus to purchase 15 new Airbus Model A330-200F freighter aircrafts. The annualized second-quarter dividend annualized equates to a 7.3% yield that will only grow as the company works through its order book.

Second is Newcastle Investment(NCT Quote), which floated out in October 2002. The mortgage REIT, simply put, has been caught in the eye of the storm.

Earlier this year, it opportunistically purchased at hefty bargains a portfolio of subprime-mortgage loans that would eventually boast a return on equity north of 20%. However, in the near term, given the continued dislocation in the residential space, investors should expect to see a negative mark-to-market on these loans that will erode book value.

Its significantly larger (76%) commercial debt portfolio continues to exhibit healthy credit trends, though, and when the market recognizes that, the recovery should precipitate. The stock is down 40% since mid-May.

Next, and I will group these two because of their similar geographies, are property management companies Eurocastle on the Euronext Exchange and Mapeley on the London Stock Exchange. Both have consistently raised their dividends since their initial offerings in 2005 and yield 6.5%.

Recent interest rate hikes by the ECB and Bank of England have pressured both of these stocks to near their 52-week lows, offering investors with a global bend an opportunity to take advantage of discount to net asset values.

The most important lesson this exercise has taught me is that one must look to be creative in the marketplace. There are numerous ways to follow smart money, and following Fortress is only one of them. Also, it does not matter what the shareholder base of a company looks like; the company's underlying fundamentals are most important.