Growth stock FTAI Aviation is Wednesday's pick for IBD 50 Growth Stocks To Watch, as shares are trying to break out of a flat base. FTAI stock soared to an all-time high on Wednesday.
FTAI Aviation specializes in aviation engine leasing and maintenance. The aerospace company owned a portfolio of 92 aircraft and 259 stand-alone engines as of Sept. 30.
The company collaborates with Lockheed Martin on its Montreal-based Module Factory. The facility is a commercial engine maintenance center focused on repair and refurbishment of engines.
FTAI Aviation ranks third out of 67 stocks in the aerospace/defense group. That group holds the No. 53 spot out of the 197 industry groups ranked by Investor's Business Daily.
Growth Stock Breaks Out
FTAI stock broke out of a flat base after topping the 37.98 buy point on Wednesday, according to MarketSmith pattern recognition. Wednesday's volume was lighter than the daily average.
The growth stock's 5% buy zone reaches to 39.88. Just remember that breakouts often fail in a weak market, so be ready to cut losses at 7% if you buy shares.
FTAI stock popped nearly 7% in heavier-than-average daily volume on Oct. 26, following the company's third-quarter earnings report the day before. Shares reclaimed their 50-day moving average on the move.
The company is on pace for a five-day, post-earnings rally after hitting an a high on Wednesday. The growth stock has soared 124% this year, far outdistancing the S&P 500's rise of just under 10%.
Further, FTAI's relative strength line hit a 52-week high, as shown by the blue dot on the MarketSmith charts.
Profitability Continues
FTAI's quarterly profit missed expectations on Oct. 25. But earnings of 33 cents a share marked a vast improvement versus a year-prior loss of 11 cents a share. Sales also missed views, but grew 26% from the prior year. Revenue growth is slowing from its once-torrid pace, which ranged from 132% to 219% in the prior four quarters.
Analyst consensus is for FTAI Aviation to post earnings of $1.65 per share in 2023 following three years of losses, according to MarketSmith data. Next year, that figure is seen growing to $2.15 a share. Estimates on both years recently were revised up, as seen by the green arrow next to the annual earnings estimates on the MarketSmith weekly chart.
The company also announced a dividend of 30 cents a share in the earnings release, which brings a 3.1% yield to shareholders.
The growth stock holds a 98 IBD Relative Strength Rating out of a best-possible 99, and its Composite Rating stands at 97. Its IBD Timeliness Rating of "A" indicates the stock has the potential to outperform stocks with lower ratings over the next 12 months, but may also be more volatile.
An Accumulation/Distribution Rating of A- for FTAI stock indicates heavy institutional buying over the last 13 weeks. Mutual funds have rapidly added shares, with 315 owning the growth stock in September, up from 250 in June and 132 in March.
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