4 Pockets of Strength for Today's Market

NEW YORK (Real Money) -- The market opened on a downbeat note so far this week and the vast majority of earnings are now in for the first quarter, with investors digesting the results. Although profits came in above where the consensus was at the end of March, earnings for the S&P 500 were still flat year over year. That's hardly encouraging in a market that goes for roughly 18x trailing earnings, especially given the negative revenue growth this quarter thanks to the strong dollar, lower oil prices and tepid global demand.

Fortunately, there are still pockets of strength in the market that are attractively priced and delivering good results.

One place to look is the aircraft-leasing sector. Airlines have rarely been more profitable, thanks to low jet fuel prices and good discipline around pricing and capacity. That bodes well for aircraft-leasing firms. After all, airlines have plenty of money to invest in new, more fuel-efficient planes, as well as to easily service their existing leases.

That's why both Fly Leasing (FLY) and AerCap Holdings (AER) blew through earnings expectations and came in above top-line consensus when they reported quarterly results over the past week.

AerCap continues to benefit from taking over the large aircraft-leasing arm of American International Group (AIG), while both AerCap and Fly Leasing trade at under 10x next year's project profits. Fly Leasing provides more than a 6% yield as well. They should both continue to do well and remain overall good values in an overbought market as long as the airline industry's fundamentals remain strong. 

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