FTAI

FTAI Aviation ($FTAI) COO Buys $1M More Shares...The Secret Behind Full Recovery from Short Attack

11/13/2025 21:41

FTAI Aviation ($FTAI) COO David Moreno purchased 6,637 shares at $153.69 per share on November 13, investing $1.02 million. This represents the most recent executive insider buying following last year's short-seller attack, signaling continued strong confidence from management at current price levels. FTAI Aviation is a New York-based large-cap aviation equipment company providing aircraft and engine leasing, aerospace product manufacturing, and maintenance services globally. The company manages 421 aviation assets, including 109 commercial aircraft and 312 engines. Since its 2011 founding, FTAI has built a unique position in aviation equipment leasing, particularly demonstrating high profitability in engine maintenance and parts business. This recent purchase is part of a systematic pattern rather than an isolated transaction. When Muddy Waters launched a short attack in January 2025, alleging accounting irregularities, shares plummeted 52% from $173 to $83. However, management including CEO Joseph Adams aggressively bought shares in the $90-130 range, and the stock has now fully recovered to $174 levels. Notably, COO Moreno first bought at $94.85 in May and decided to add more shares even after a 60%+ rally, which is particularly noteworthy. This management behavior demonstrates strong confidence in the company's fundamentals. Indeed, FTAI Aviation's recent financial performance is solid. On a TTM basis, the company recorded $2.34 billion in revenue, $4.37 EPS, and 31.17% operating margin, with the aerospace products segment growing 71.6% year-over-year, exceeding market expectations. Twelve of 13 brokerages maintain buy ratings with a median price target of $182.57, suggesting approximately 5% upside potential. However, investors must not overlook significant risk factors. The biggest concern is the debt-to-equity ratio of 1,381%. While this is typical for the capital-intensive aviation equipment leasing industry, it could become a burden during rising interest rate periods. Additionally, negative operating cash flow of -$173 million and negative free cash flow of -$866 million on a TTM basis raise questions about cash generation capability. However, a current ratio of 5.84 and $510 million in cash holdings show stability in terms of short-term liquidity. The aviation equipment leasing market itself has structural growth drivers. With global air travel demand recovery and airlines' pursuit of capital efficiency, leasing ratios continue to expand. Particularly, the engine maintenance market is valued as a stable revenue source due to high technical barriers to entry. Long-term contracts like FTAI Aviation's V2500 engine maintenance agreement with IAE enhance cash flow predictability. Key indicators investors should monitor include: positive signals such as continued management share purchases, strong growth in aerospace products segment, and consistent analyst buy recommendations. Warning signs to watch include quarterly volatility in aviation equipment sales performance, interest rate sensitivity due to high leverage, and persistent negative cash flow. Particularly, changes in Federal Reserve monetary policy or broader aviation industry demand slowdown could make the high-leverage structure burdensome. In an optimistic scenario, continued growth in air travel demand and expanding profitability in engine maintenance business would improve cash flow and gradually reduce leverage ratios. The base case scenario maintains current growth trends with shares trading around analyst target levels in the $180s. In a risk scenario, rising interest rates or aviation industry shocks could cause high leverage to become a drag, potentially pushing shares back to the $120s. The COO's recent purchase indicates management's high assessment of additional upside potential even at current price levels. However, investors should carefully consider structural risks including high leverage and negative cash flow before making investment decisions.