AAR Corp (NYSE: AIR) has enjoyed a solid week (up about 6 percent from last week’s closing price) thanks to and a general rally in airline shares. Since joining our portfolio on February 24, 2017, AIR has returned better than 10 percent, which compares favorably to the S&P 500’s 4.5 percent return (counting dividend reinvestment) over that same period, so the stock has been a solid one for us.

The company generated $492.3 million in fiscal fourth-quarter revenue and $0.44 per share in earnings. Both figures beat The Street’s expectations and represent 5.1 percent and 29.4 percent year-over-year growth, respectively.

AAR attributed the revenue increase to strong sales in the Aviation Services segment to commercial customers (i.e., commercial airlines) as air travel trends remain favorable. During the quarter, the company also achieved significant new business wins, the largest of which is a $909 million contract from the U.S. Air Force Performance-Based Logistics One program. This is a long-term contract under which the work is expected to be completed by 2032.

Under this contract, AAR will provide total supply chain management, from purchasing to inventory control and all steps in between, to support the Air Force requisitions received for certain types of landing gear parts. However, there’s a protest filed by one of the competing bidders for the contract so performance is still on hold pending the resolution of the protest. AAR thinks a decision on the protest will be known before the end of July.

AAR also won contracts with foreign airlines in Europe and Latin America, expanding its international presence.

The main legal situation the company is involved in is the a lawsuit filed by DynCorp against the U.S. government for awarding a contract to AAR for the Bureau of International Narcotics and Law Enforcement Affairs (INL) Global Aviation Support Services worth up to $10 billion over a contract length of up to eleven years. DynCorp was the incumbent contractor, but the Department of State awarded the new contract to AAR in September 2016. Although the Government Accountability Office upheld the award to AAR last December, DynCorp filed a new claim to The U.S. Court of Federal Claims (COFC). The COFC expects to rule on or before October 31, 2017.

Until a final decision is made and the award to AAR made final, the company isn’t performing any service under the contract. But CEO David Storch thinks that the delay won’t affect the ramp up once the matter is resolved. AAR is involved in the case as an intervenor, and spent 4 million in the fourth quarter in legal fees, but expects the legal obligations to stop once the decision is made. It also projects the legal expense to be lower than 4 million in the current quarter.

During the week the company also announced a $0.075 quarterly dividend payable to shareholders of record on July 21. The ex-dividend date is July 19. Moreover, and the board of directors authorized the repurchase of up to $250 million in common stock. Since March 2015, AAR has repurchased about $187 million shares under a previous $250 million repurchase authorization. The new repurchase plan is essential a renewal of the previous plan.

In the last couple of weeks, major airlines like Delta (NYSE: DAL), United (NYSE: UAL), and American Airlines (Nasdaq: AAL) have all issued solid outlooks for the airline industry as demand for air travel and passenger trends remain strong. Other smaller airlines have issued similar comments. The more miles airlines fly, the more maintenance and repairs aircrafts need, thus it’s clear a healthy airline industry is a tailwind for AAR.

Today, after opening strongly in early trading, AIR has given back the day’s gains after an SEC filing showed that board member Ronald Woodard sold 20,000 shares (about half of his holdings) on July 13 at an average price of $37.22. While the market reaction is negative to the insider selling, it’s important to keep in mind that he’s likely just selling to take advantage of the recent rally in the stock to raise some cash for himself. After all, a $740,000 payout is a good amount of cash for anybody. In the long run, provided the fundamentals stay intact, some insider selling is inconsequential in the big picture.

The stock has now exceeded our suggested buy-up-to price after a nice rally. We keep our suggested buy-up-to price at $37 for the time being, which makes the shares now a “hold” in the near term.