10 Most Undervalued US Stocks to Buy According to Hedge Funds

8. United Airlines Holdings Inc. (NASDAQ:UAL)

Forward P/E Ratio as of March 6: 7.1

Number of Hedge Fund Holders: 86

United Airlines Holdings Inc. (NASDAQ:UAL) delivers comprehensive air transportation services across a vast global network. It connects passengers and cargo throughout North America, Asia, Europe, and beyond, while also offering essential support services like ground handling and maintenance.

In Q4 2024, the company’s international flights were more profitable than its US flights. Flights to Asia were making 4.1% more money per seat than the year before (Pacific PRASM/Passenger Revenue per Available Seat Mile), which is a shift from the 15.7% decline in Q3. It also added 31% more seats to Asia in 2024, restoring pre-pandemic levels. Flights across the Atlantic Ocean also earned 7.1% more money per seat, without the addition of more seats. United Airlines Holdings Inc. (NASDAQ:UAL) is the largest US carrier on Atlantic routes and anticipates a record-breaking Q1 2025 in this sector.

In 2025, the company will fly smaller 737 planes from Japan to other Asian cities. It will use its base in Guam to make it easier for people to travel between the US and Asia. It will make current international flights more efficient by trying to fill more seats on each flight. The company expects strong international performance to continue due to limited wide-body jet deliveries.

Patient Capital Management highlighted the company’s strong Q4 2024 performance which was driven by robust travel demand, a new buyback program, improved customer service, and its leading profitability in the industry. It stated the following in its Q4 2024 investor letter:

“United Airlines Holdings, Inc. (NASDAQ:UAL) had a strong fourth quarter, gaining 70.2% in the period. The company benefitted from continued strong demand that surprised the market as well as the initiation of a buyback program, the first since COVID. There continues to be strong travel demand from both retail and business travelers. According to the International Air Transport Association (IATA), global air passenger travel is still below the pre-COVID implied trend path despite reaching a new all-time high this year. United’s focus on the customer over the last few years has led to strong improvement in net promoter scores (NPS) which should continue to flow through the model via better TRASM (total revenue per available seat mile) and higher cash flows and earnings. As of today, United alone accounts for ~30% of the overall industry’s profits. We expect this market share to grow and be defensible as we transition to an environment where customer service becomes the differentiating factor, and scale provides unparalleled ability to reinvest in the customer experience.”