GO
Loading...

On the Line: Genesis Lease CEO John McMahon

Thursday, 1 May 2008 | 6:51 PM ET

When Cramer gets something wrong, he owns it. And, boy, did he get Genesis Lease wrong.

GLS CEO on Airlines
Discussing the state of the airline industry, with John McMahon, Genesis Lease Limited CEO and Mad Money host Jim Cramer.

The aircraft leasing stock, which he recommended last year, is down a whopping 49% since the call. But CEO John McMahon, whom Cramer spoke to on Thursday’s show, said the company’s fundamental business remains the same.

So what gives? According to McMahon, it’s the uncertainty in the market. He maintained that Genesis has a globally diverse portfolio, fuel efficient aircraft, no near-term refinancing or unfunded commitments and a $750 million credit line. But worry about the airline industry has spilled over to the leasing business, he said.

There’s a general lack of understanding about how the aircraft leasing business works, said McMahon. It’s a separate entity entirely from the actual airline industry and isn’t subject to many of their problems – even though you might not know it by looking at their stocks. Genesis still pays out a dividend of $1.88 that yields 13.5%, he said.

Cramer’s not entirely convinced. The market can be mistaken, he said, but this stock has been down for too long.

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.