Not every winning growth stock has been an AI play in 2023.
FTAI Aviation is clearing a three-weeks-tight pattern with a buy point of 36.67, according to IBD MarketSmith chart analysis. The IBD 50 Stocks To Watch pick has impressive technical ratings and equally strong sales growth. Also important, the growth stock has already demonstrated it can rocket higher by gaining an eye-catching 114% this year, trouncing the S&P 500's 18% gain.
If investors put $10,000 into FTAI stock on Dec. 30, 2022, they would have turned it to $21,419 by now.
The Relative Strength Rating is nearly perfect at 98 while the Composite Rating is not far behind at 94. The EPS Rating lags at 74, mitigated by explosive sales growth.
FTAI is in the aerospace and defense group, which ranks No. 48 among IBD's 197 industry groups. The company owns and maintains jet engines for airlines and engine repair businesses. The company also leases aircraft.
FTAI has a record of strong sales growth, but earning have been mixed over the past seven quarters. In the second quarter, sales grew 145% to $274.4 million. Earnings per share of 46 cents grew 18%. A cash dividend of 30 cents per share was payable on Aug. 29 to shareholders on record as of Aug. 14. The company generated $148 million in positive cash flow during the quarter, which will be used for new asset acquisitions and investments.
Shares fell after earnings on July 26 to test the 21-day exponential moving average, but have risen since, gaining 12%.
The growth stock fell on March 9 after the company announced that it had priced its previously announced public offering of 2.6 million preferred shares at $25 each. The company planned to use proceeds of $65 million from the offering for general corporate purposes. Fitch Ratings gave the obligation a B rating on March 17. Shares fell to test support at the 50-day line after the news.
Fortress Transportation and Infrastructure Investors went public in 2015 under the ticker FTAI. In August 2022, the company was renamed FTAI Aviation after a merger with FTAI Finance Holdco Ltd. Also in 2022, FTAI completed its spinoff of FTAI Infrastructure, which started trading on the Nasdaq under the ticker FIP.
Growth Stock Gains Over 100%
The stock has gained more than 100% so far this year, making the S&P 500's 18% advance look tepid.
The Accumulation/Distribution Rating for the growth stock is a bullish B+, a reflection of interest from institutional investors. Mutual funds own 38% of outstanding shares. More funds have been buying shares of FTAI Aviation over the past five quarters, including the Columbia Small Cap Growth Fund (CMSCX).
Exchange traded funds hold shares of FTAI as well. The First Trust Small Cap U.S. Equity Select ETF and the iShares Russell 2000 Growth ETF hold shares.
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