In this article, we will take a look at the 6 best airline stocks to buy according to hedge funds. To see more such companies, go directly to 12 Best Airline Stocks To Buy According to Hedge Funds.
6. Spirit Airlines, Inc. (NASDAQ:SAVE)
Number of Hedge Fund Holders: 23
Spirit Airlines, Inc. (NASDAQ:SAVE) is under pressure currently after the Department of Justice sued to block the company’s merger with JetBlue, citing competition concerns.
Recently, TD Cowen decreased Spirit Airlines, Inc. (NASDAQ:SAVE)’s price target to $20 from $30 and kept a Market Perform rating on the shares.
Nonetheless, Spirit Airlines, Inc. (NASDAQ:SAVE) was one of the most popular airline stocks among the elite hedge funds tracked by Insider Monkey. As of the end of the fourth quarter of 2022, 23 hedge funds had stakes in Spirit Airlines, Inc. (NASDAQ:SAVE). The total value of these stakes was $295 million. The biggest stakeholder of Spirit Airlines, Inc. (NASDAQ:SAVE) was Himanshu Gulati’s Antara Capital which owns an $83 million stake in the company.
5. Copa Holdings, S.A. (NYSE:CPA)
Number of Hedge Fund Holders: 26
Copa Holdings, S.A. (NYSE:CPA) is the parent of Panamanian carrier Copa Airlines. Recently, Copa Holdings, S.A. (NYSE:CPA) posted traffic data for February. Seat miles in the period increased by 2.6% in the month when compared to February 2019. The number of miles flown by revenue passengers increased 5.4% when compared to February 2019 to 1.72 billion.
In January, JPMorgan’s analyst Guilherme gave positive comments about Copa Holdings, S.A. (NYSE:CPA). The analyst said Copa Holdings, S.A. (NYSE:CPA) has a comfortable balance sheet situation. The analyst also said that Copa Holdings, S.A. (NYSE:CPA)’s immediate liquidity over short-term payables is the best among the LatAm group.
At the end of the last quarter of 2022, 26 hedge funds tracked by Insider Monkey had stakes in Copa Holdings, S.A. (NYSE:CPA). The most notable hedge fund stakeholders of Copa Holdings, S.A. (NYSE:CPA) during this period are Ken Griffin’s Citadel Investment Group ($75.2 million stake), Paul Marshall and Ian Wace’s Marshall Wace LLP ($53.4 million stake) and Anand Parekh’s Alyeska Investment Group ($47 million stake).
4. American Airlines Group Inc. (NASDAQ:AAL)
Number of Hedge Fund Holders: 31
American Airlines Group Inc. (NASDAQ:AAL) is one of the most popular airline stocks among the elite hedge funds in Insider Monkey’s database of 943 hedge funds. 31 hedge funds reported owning stakes in American Airlines Group Inc. (NASDAQ:AAL) at the end of the December quarter. The total worth of these hedge funds’ stakes was $563 million. The biggest hedge fund stakeholder of American Airlines Group Inc. (NASDAQ:AAL) was John Overdeck and David Siegel’s Two Sigma Advisors which had a $136 million stake in the company.
Recently, S&P Global Ratings upped its outlook for American Airlines Group Inc. (NASDAQ:AAL) to Positive from Stable and boosted certain issue ratings.
S&P Global Ratings expects American Airlines Group Inc. (NASDAQ:AAL) to continue to improve its earnings and cash flow in 2023 on the back of strong passenger demand and industry capacity constraints that support higher fares.
The ratings agency believes American Airlines Group Inc. (NASDAQ:AAL) is well positioned to generate strong credit measures even as it faces debt maturities.
3. United Airlines Holdings Inc (NASDAQ:UAL)
Number of Hedge Fund Holders: 35
A total of 35 hedge fund in Insider Monkey’s database had stakes in UAL as of the end of the fourth quarter of 2022. The biggest stakeholder of the company is GLG Partners of Noam Gottesman with a $58 million stake.
Here is what the company management said during its latest earnings call:
The United is the largest carrier to be flattish versus 2019, which provides for an easy setup and positive RASM year-over-year. International demand remains incredibly strong, and we are looking at the potential for record profits and margins across our global network. Asia has traditionally been a margin drag on our global flying, but we’ve worked diligently to rebuild the network and close this gap. And we think 2023 will validate that we accomplish that goal. Asia is also close to being fully opened, allowing United to reestablish the bulk of the specific flying outside of China. It’s worth noting that restrictions on the use of Russian airspace will constrain United from flying both of our China network in 2023. This same restriction will also limit our ability to fly to India.
2. Delta Air Lines, Inc. (NYSE:DLA)
Number of Hedge Fund Holders: 51
Delta Air Lines, Inc. (NYSE:DLA) ranks 2nd in our list of the best airline stocks to buy according to hedge funds. Recently, Evercore ISI upgraded Delta Air Lines, Inc. (NYSE:DLA) to Outperform rating from in-Line. The investment firm said in a note to investors that Delta Air Lines, Inc. (NYSE:DLA)’s stock has lagged legacy peers like United Airlines and American Airlines in 2023.
Evercore ISI also increased its 2023 EPS estimate for Delta Air Lines, Inc. (NYSE:DLA) by 17%.
Delta Air Lines, Inc. (NYSE:DLA) recently reiterated its Q1 guidance. Delta Air Lines, Inc. (NYSE:DLA) expects revenue growth of 14% to 17% for the quarter when compared to 2019.
EPS in the period is expected to come between $0.15 to $0.40 versus the consensus estimate of $0.33.
1. Southwest Airlines Co. (NYSE:LUV)
Number of Hedge Fund Holders: 51
Southwest Airlines Co. (NYSE:LUV) ranks 1st in our list of the best airline stocks to buy according to hedge funds.
Recently, Southwest Airlines Co. (NYSE:LUV) shared its guidance data for the first quarter of 2023 and the full year. Southwest Airlines Co. (NYSE:LUV) expects its operating revenue in the first quarter to increase by 21% to 23%. This was less than the previous growth guidance of 20% to 24%.
For the full-year 2023, Southwest Airlines Co. (NYSE:LUV) expects its capital spending to be about $4 billion, down from the earlier estimate of $ billion to $4.5 billion.
At the end of the last quarter of 2022, 51 hedge funds tracked by Insider Monkey had stakes in Southwest Airlines Co. (NYSE:LUV). The total worth of these hedge funds’ stakes was $998 million. The biggest stakeholder of Southwest Airlines Co. (NYSE:LUV) was Paul Reeder and Edward Shapiro’s PAR Capital Management with a $67 million stake in the company.
You can also take a peek at 15 Most Promising Dividend Stocks According to Analysts and 15 Most Promising Long-Term Stocks.
