What:

I am initiating the third (3) BUY recommendation of AAR Corp (NYSE: AIR).

Why:

After recommending a purchase of AAR’s shares yesterday at around $34 per share, AAR fell significantly today to another level at which I felt it prudent to further add to our position in the stock.

At these prices, or anything lower, you should seriously consider a full position in AAR, and at the very least purchase a small amount at these levels and add to your position on any weakness.

Today’s sell-off occurred for a few reasons:

• AAR issued their 10-Q filing, which I will be going over in more detail, that showed a more negative cash-flow than most analysts were probably expecting, but which was fully detailed and explained in AAR’s conference call.Cash flows were more negative because of increases in inventories, new aircraft acquisitions, which down the line will pay off handsomely, as well as the recent acquisition of Summa Technologies, which was paid for in cash.

• The market’s weakness towards the end of the day exacerbated AAR’s sell-off.

I believe this sell off was an overreaction, and coupled with the overall market sell-off today, gives patient and well-researched investors like us, a fantastic opportunity to round out our full position in AAR at phenomenal prices.

AAR’s just announced earnings release (which I went over briefly, and will detail more thoroughly later) only strengthened my original investment thesis, and showed great improvements in the few areas in which I was concerned.

Anything under $31 a share for AAR is a bargain, and you should add shares to your portfolio immediately for long term investment, and add more shares on any weakness below this level.

Read my full company research report and buy recommendation on AAR Corp.

Variables You Should Know:
Risk Rating:	5 (Average)
Position Size:	1/2 (10-22-07), 1/4 (1-8-08), 1/4 (1-9-08)
Buy Around Price:	$30.00 (10-22-07), $34.00 (1-8-08), $31.25 (1-9-08)