Seeking Alpha: FLY Leasing Still Trying To Close Its ROE Gap

Within the world of aircraft lessors FLY Leasing (NYSE:FLY) remains a more challenging investment prospect. Not only is FLY Leasing quite a bit smaller than AerCap (NYSE:AER), Air Lease (NYSE:AL), AWAS, and Aircastle (NYSE:AYR), its margins, ROE, and credit quality are all lower. Management has succeeded in boosting utilization to 100% and is continuing to expand the fleet as air travel demand increases, but Wall Street still seems rather skeptical regarding the company's real asset value and the likelihood that the company can achieve double-digit ROEs.

While I don't think FLY Leasing is ever going to generate results on par with AerCap or Air Lease, and I do have some concerns about leasing headwinds and risks to emerging market air traffic, FLY Leasing still looks too cheap. I wasn't exceptionally bullish on the company in January, and I'm still not today, but there does appear to be value here for investors who can accept the risk that FLY Leasing will fail to improve as much as management says it expects to improve.

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FLY Leasing Still Trying To Close Its ROE Gap