Air Transport Services Group

The company announced its credit limit with its bankers was raised $100 million. Quint Turner, chief financial officer, said that the company will use the extra credit to keep up with demand for its planes. The company also announced it had approved an additional $25 million for share repurchases. Air Transport provides air cargo transportation and related services.  

Barron’s recently highlighted ATSG as a strong buy. It notes that BB&T Capital Markets analyst Kevin Sterling sees the stock climbing to $18 in the next 12 months from the current $12.61 a share, a 43% gain. This price target is based on ATSG’s  earnings multiple expanding to more than 20 from a current 14.5, based on the Amazon opportunity.

Charles River Labs

Charles River just landed a new customer, Moderna. Moderna is a clinical stage pioneer of an entirely new in vivo drug technology that produces human proteins, antibodies and novel protein constructs inside patient cells., This revolutionary technology helps drug development teams target previously obscured drug targets

Drew Industries

RV shipments in 2015 totaled 374,000, which is the best annual total since 2004, according to data from the Recreation Vehicle Industry Association. Low gas prices, an increasing number of retirees and low interest rates are some of the factors behind this growth. This trend is good news for RV component supplier Drew Industries.

Drew customer Thor Industries (THO) recently reported strong numbers for the third quarter. Although overall RV (towable plus motorized) sales were up just 6%, motorized RV’s, which include more of Drew’s parts, saw a 24% increase. Backlog for towable and motorized RVs was up 50% and 36% respectively, a positive omen for Drew’s future sales.

Also, Drew announced a 30 cent quarterly dividend last month. The dividend will be paid out on June 17 to those who held Drew stock by June 6.

SolarEdge Technologies

The Wall Street Journal recently highlighted the trend of consumers buying solar panel systems outright instead of leasing them. The troubles that leasing companies like SolarCity and Vivint Solar have run into by overextending themselves by financing this big build has been well documented.

Industry expert GTM research expects that leasing, which accounted for 72% of home solar sales in 2014, will see its share drop to 48% in 2017. Although the upfront cost for consumers is larger, the long-term economics make sense for them to buy instead of lease.

For example a California homeowner might pay $18,000 upfront for an average sized system. A 20-year lease on that same system would result in total payments of $37,000 over the term. With more companies offering fair financing for panels, buying them is an available and cost effective option.

SolarEdge has already benefited from this shift. In its most recent quarter the company noted that a distributor has replaced solar leasing companies as its largest customer. Distributors tend to sell to smaller regional players that sell directly to homeowners and corporations. We like the security in a less volatile and concentrated customer base and expect SolarEdge to continue to grow earnings from solar expansion.