Market Monitor: Caleb Silsby

This week’s Market Monitor has names of three stocks he says you’ll want to own for three years or longer. He’s Caleb Silsby, senior vice president and senior portfolio manager at Whittier Trust.

Air Lease Corp (AL) – Passenger Air Travel will increase faster than global GDP

  • Air Lease Corp leases planes to airline carriers like Southwest, American Airlines and other regional carriers.
  • Planes were owned in the 1960’s, 40%+ are leased today
  • Leasing trends will continue as smaller airlines in emerging economies lack access to cheap financing.  Air Lease has the ability to borrow cheaper than the airline carriers and has better bargaining power with the manufacturers (such as Boeing & Airbus).
  • Steve Hazy is a legend in the aircraft leasing space and he is repeating his success with Air Lease.  Hazy is the chairman of Air Lease, he started another company back in the 1960’s, which is now the largest competitor to Air Lease.
  • Air Lease was founded in 2010 and now owns 237 aircraft and generates $1bn/year in operating cash flow.   The stock trades at less than 12 times forward earnings.

 

 

 

 

 

 

Biogen (BIIB) – A silver Tsunami is coming with the aging baby boomers

  • A leader in addressing the most complex brain diseases.
  • Exciting pipeline with multiple stage three trials for Alzheimers medication. There are currently 25 million people with Alzheimers
  • This will be a $13 billion market over the next seven years
  • Biogen has dedicated research to inhibiting or blocking the production of amyloid plaque that has been linked to Alzheimer’s.  Biogen has been growing revenue and is highly profitable.  The Alzheimer’s pipeline will be additive to their strong existing product lineup.
  • Biogen is not only set up to be a profitable and growing business, it will also have a meaningful impact on improving the quality of life for millions of people around the world.

 

 

 

 

 

 

Alphabet – Google(GOOGL)- Targeted Advertising will pay billions to a few players

  • Google benefits from having consumers that are searching with purchasing intent. You have 3.4 billion internet users.
  • Internet advertising is over $75bn/year in US, consistently growing 15-20%.
  • Traditional advertising still accounts for 59% of ad spend.  But there is a secular shift towards internet and mobile advertising and Google takes 50 cents of every incremental advertising dollar.
  • Google has a growing ecosystem.  Google Photos, Chrome, Nest, Google Home, are all integrating together, gathering data and creating an ecosystem that is incredibly valuable to advertisers.  Their entry into hardware with the Google Pixel could prove to be a game changer as well.

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