10 Best Airline Stocks to Buy According to Hedge Funds

4. Alaska Air Group, Inc. (NYSE:ALK)

Number of Hedge Fund Holders: 30

Alaska Air Group, Inc. (NYSE:ALK) is an American airline holding company that owns Alaska Airlines, one of the largest airlines in North America.

It is one of the best airline stocks to buy according to hedge funds. Citadel Investment Group has the most dominant holding in the company, among hedge funds tracked by Insider Monkey, owning over 3.9 million shares valued at nearly $158 million, as of the end of Q2 2024. Driven by robust financial performance, hedge fund sentiment continues to improve as well, with the number of hedge funds investing in the company growing from 28 in Q1 to 30 at the end of the second quarter.

The company had another strong quarter in Q2, posting a revenue of $2.9 billion, the highest quarterly result in its history. Nearly $1 billion of this was contributed by premium segments. GAAP net income for the quarter was recorded at $220 million, while adjusted net income was recorded at $327 million. It also posted an industry-leading adjusted pre-tax margin of 15.8%.

Looking ahead, the company was encouraged by advanced bookings during Q3, especially for August and September, which were outpacing the expected capacity growth of 2-3%. However, it expects some pressure from labor costs, provided a tentative agreement with flight attendants for a 32% increase in compensation is ratified.

While final results for Q3 are still awaited, a major story broke on September 18, with Alaska Air Group, Inc. (NYSE:ALK) announcing a $1.9 billion acquisition of Hawaiian Airlines, after reaching an agreement with the U.S. Department of Transportation. The two airlines agreed to maintain key Hawaiian routes under a six-year agreement. The deal is set to further enhance Alaska’s strength and broaden its presence in both domestic and international markets.

This acquisition has led to a bullish sentiment around the stock. Wall Street analysts forecast a near 20% appreciation in Alaska’s share price while maintaining the stock’s Strong Buy rating.