As its name implies, Air Lease (NYSE:AL) purchases aircraft and leases them to airlines. Its stock fell 16.6% from $32.12 to $26.78, trimming 33 basis points from the Fund’s return. The company reported better-than-expected earnings and held an upbeat investor day where Air Lease highlighted its expectation to double its aircraft fleet over the next five years. Nonetheless, the stock dropped due to concerns that slowing global growth could negatively impact air traffic. Despite this concern, we believe long-term air travel demand will remain robust, and airlines will continue to utilize the financial flexibility offered by leasing.
From Jerome Dodson (Trades, Portfolio)'s Parnassus Fund second quarter 2016 commentary.
