Feature: Researching equity in leasing sector

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04 October 2011

Is a market capitalization of $4.9 billion enough to have meaningful equity coverage for the public leasing sector?

The only publicly listed aircraft lessors - AerCap, Aircastle, Air Lease Corporation (ALC) and Fly Leasing - have a combined equity market capitalization of $4.9 billion. About 15 analysts cover these four lessors, but not all of the analysts cover each leasing company. German airline Lufthansa alone has 28 analysts covering it.

Typically a bank or investment firm’s equity research department is responsible for designating coverage of a particular sector. The decisions are usually motivated by a firm’s investor clients and what it thinks clients would be interested in investing.

More analysis might attract more investors to the industry.

"If we had more leasing companies that came to the market and were listed, you would see the level of coverage increase meaningfully," says Aengus Kelly, chief executive officer, AerCap. "Then investors would understand the true value of this business and the true risks and rewards associated with it."

AerCap,...

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