AerCap Holdings (AER) Highlighted As Storm The Castle Stock - TheStreet

Trade-Ideas LLC identified

AerCap Holdings

(

AER

) as a "storm the castle" (crossing above the 200-day simple moving average on higher than normal relative volume) candidate. In addition to specific proprietary factors, Trade-Ideas identified AerCap Holdings as such a stock due to the following factors:

  • AER has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $100.1 million.
  • AER has traded 3.5 million shares today.
  • AER is trading at 2.11 times the normal volume for the stock at this time of day.
  • AER crossed above its 200-day simple moving average.

'Storm the Castle' stocks are worth watching because trading stocks that begin to experience a breakout can lead to potentially massive profits. Once psychological and technical resistance barriers like the 200-day moving average are breached on higher than normal relative volume, the stock is then free to find new buyers and momentum traders who can ultimately push the stock significantly higher. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize on. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on AER:

AerCap Holdings N.V., an independent aircraft leasing company, engages in the leasing, financing, sale, and management of commercial aircraft and engines. AER has a PE ratio of 7. Currently there are 8 analysts that rate AerCap Holdings a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for AerCap Holdings has been 2.4 million shares per day over the past 30 days. AerCap has a market cap of $8.6 billion and is part of the services sector and transportation industry. The stock has a beta of 1.80 and a short float of 7.3% with 3.72 days to cover. Shares are up 13.9% year-to-date as of the close of trading on Friday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates AerCap Holdings as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and weak operating cash flow.

Highlights from the ratings report include:

  • AER's revenue growth has slightly outpaced the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for AERCAP HOLDINGS NV is currently very high, coming in at 85.79%. Regardless of AER's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AER's net profit margin of 22.24% significantly outperformed against the industry.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Trading Companies & Distributors industry and the overall market on the basis of return on equity, AERCAP HOLDINGS NV has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Net operating cash flow has decreased to $796.40 million or 10.01% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio is very high at 3.64 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.

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