Share Buybacks to Propel the Next Rally?

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Well, we will get CPI revisions today that could either improve or worsen the inflation picture. But it is unlikely to be pivotal to the market’s future direction. NatAlliance Securities’ Andrew Brenner believes next Tuesday’s CPI numbers will carry a heavier weight. - “There is some talk that tomorrow’s CPI revisions could throw cold water on the recent good inflation numbers — but this is a wonky number,” said Andrew Brenner at NatAlliance Securities. “We think the next move comes off the CPI number next Tuesday.” Andrew Brenner at NatAlliance Securities (Photo: Bloomberg) Speaking of economic data, yesterday’s jobless claims fell which painted a picture of a strong labor market. And of course, it reinforces the Fed Reserve’s recent messaging that rate cuts won’t happen in March. But the data is also positive since it could hint that a recession is not a near-term concern. A strong economy naturally translates into strong earnings. As a result, companies have announced share buybacks at an incredible pace. There were $105 billion in planned share buybacks in the first seven days of February, beating the total number in January. Big Tech is flush with cash. Apple, Microsoft, Alphabet, Amazon and Meta generated a record $139 billions of combined cash from operations in the fourth quarter. Meaning? Lots, lots of cash to deploy for share buybacks. (Source: Bloomberg) Share buybacks are a powerful way to sustain a rally in the stock market. You can see how share buybacks soared since 2013, and the stock market naturally followed with more than a decade worth of a bull market. 2024 already saw a bunch of buybacks, so could it be a sign of another rally coming? We will see. Top Dividend Stock To Own Right Now Today’s Stock Pick: FTAI Aviation ([FTAI]( This stock is a wonderful one for a dividend investor to own. First, let’s talk about the company itself. FTAI Aviation is a global aviation and power equipment leasing company. The company would acquire aircraft and lease them to airline companies. And it also develops aircraft engines and aftermarket components primarily for the CFM56-7B/5B commercial aircraft engines. All in all, it owns a portfolio of 92 aircraft and 259 standalone engines as of September, 2023. The huge opportunity lies in the aftermarket for CFM56-5B engines. It is the largest engine market ever produced with over 22,000 engines manufactured and 21,000+ still in service today. However, GE Care is exiting this market to focus on new technology engines. This leaves companies like FTAI to fill in the niche. Aftermarket care for CFM56 is expected to grow at a whopping pace of 16% between 2022 and 2030, while GM Care’s market share of 26% is expected to shrink to 10% in the same period. (Source: FTAI Aviation) This is an important segment because the margins are insane. The adjusted EBITDA margin was above 38% for the segment. In the most recent quarter, the company earned an adjusted EBITDA of $40.6 million on revenue of $107.1 million. That’s a lot of money going straight to the company’s pocket! (Source: FTAI Aviation) This segment makes up a small percentage of FTAI Aviation’s adjusted EBITDA, but that is going to change soon. FTAI made zero dollar on Aerospace products in 2020. Now, it accounts for 25% of the revenue for Q3’23 run-rate. (Source: FTAI Aviation) As a result, FTAI generated $492 million in positive free cash flow position in 2023 YTD. This will lead to more asset acquisitions. For example, it acquired 23 stand-alone engines & 10 narrowbody Aircraft during Q3 2023. This can only lead to bigger adjusted EBITDA down the road. Meaning? Lots of dividends for the shareholders! The stock currently yields an attractive 2.27%. With its blueprint of acquiring aircrafts and engines to generate income, an investor can feel assured that the dividend growth will continue for many quarters to come. Bottom line: FTAI Aviation has mastered the nice business model in the airline industry. Its products are essential. People will always need to fly. With its strong free cash flow position, the company has plenty of funds to grow its income through asset acquisition. This is a perfect stock for dividend lovers.   [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](     © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](