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