Stock Research: ATSG

To start my search for small cap companies, I set my FINVIZ screener to a P/E below 30 with positive EPS and scanned through each result looking for companies that seemed interesting. One of those companies was Air Transport Services Group (ATSG) whose business model is to buy older aircraft's and lease them out. Currently their main lessee is DHL.

On two reasons this stock interested me. First Boeing is rolling out a lot of 787, 777, and 737s to airlines who are retiring their older planes. This should give Air Transport a buying opportunity to expand its fleet. Second as more people shop online shipping and air freight should grow in demand. This stock seems to be a secondary small-cap play on both the aircraft and shipping industry.

After reading their 2013 Q1 transcript, I'm going to monitor but not add any positions. They indicated demand is flat right now and are focusing profits on paying down debt they took out to acquire new planes (which are expected to enter service later this year). Their chart still shows a positive growth trend since the beginning of the year but is above all moving averages. I'll also be monitoring a competitor (AAWW) who actually has higher EPS.

Source: Finviz.com