One of the most preferred airlines in America, Delta Air Lines, Inc. (NYSE:DAL) is all set to improve the flying experience of the growing list of NBA stars and teams it transports around the country (and occasionally outside of it, to Toronto) dozens of times annually. In a tentative agreement between the airliner and the National Basketball Association charters, the airline company will replace Airbus A319s with Boeing 757-200s planes for the upcoming basketball season. As per the accord, Delta Air Lines, Inc. (NYSE:DAL) is likely to add four more teams to the list of teams it transports during the season, as it will fly as many as 27 teams during the upcoming season, in which the recently crowned Golden State Warriors will be looking to defend their title. The arrangement indicates the importance that the airliner places towards flying its select group of customers.
Delta will use 11 Boeing 757-200s for ferrying NBA players throughout the season. More legroom and swiveling seats are not the only features offered in these flights, as the crew pays special attention towards the food preference of individual players. If the agreement is sealed with the replacement of Airbus A319s with Boeing 757-200s, Delta Air Lines, Inc. (NYSE:DAL) would make the 126-seat A319s available for public trips again, taking the place of some of the 180-seat 757-200s, which might drive airfares and margins higher for those flights.
It has been somewhat of a volatile year for the shares of Delta Air Lines, Inc. (NYSE:DAL), which have declined 18.75% year-to-date. Despite the decline in share price, the smart money maintains a positive outlook on the stock, with 116 hedge fund managers tracked by Insider Monkey holding positions in the company worth $7.15 billion as of March 31. One quarter earlier, 110 hedge fund investors had $7.53 billion invested in the airliner; however, the decline in aggregate investments can be contributed to Delta Air Lines, Inc. (NYSE:DAL)’s volatile stock, which dipped by over 8% during the first quarter. Thus overall hedge fund interest was slightly positive.
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Along with positive hedge fund sentiment, the insiders are expecting growth in Delta Air Lines, Inc. (NYSE:DAL)’s stock, with three insiders purchasing shares in the past six months. George Mattson, Director at Delta Air Lines, added 5,000 shares of the company to his portfolio along, while fellow directors William H. Easter and Francis Blake added 3,500 and 5,000 shares respectively.
With positive insider and hedge fund sentiment, Delta Air Lines is expected to post better results in the upcoming quarter. Let’s take a look at the recent hedge fund movements concerning the stock of the airliner.
What have hedge funds been doing with Delta Air Lines, Inc. (NYSE:DAL)?
Heading into the second quarter, a total of 116 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings considerably.
According to hedge fund intelligence website Insider Monkey, Lansdowne Partners, managed by Alex Snow, holds the biggest position in Delta Air Lines, Inc. (NYSE:DAL). Lansdowne Partners has a $1.11 billion position in the stock with 24.76 million shares comprising 10% of its 13F portfolio. The second-most bullish hedge fund manager is PAR Capital Management, led by Paul Reeder and Edward Shapiro, holding a $506.1 million position including 11.26 million shares; the fund has 11.7% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions comprise David Cohen and Harold Levy’s Iridian Asset Management, Doug Silverman and Alexander Klabin’s Senator Investment Group, and Ross Margolies’ Stelliam Investment Management.
Specific money managers have been driving this bullishness. GMT Capital, managed by Thomas E. Claugus, created the largest position in Delta Air Lines, Inc. (NYSE:DAL). GMT Capital had $241.2 million invested in the company at the end of the first quarter. James Dinan’s York Capital Management also initiated a $140.2 million position during the quarter. The other funds with brand new Delta Airlines positions are Curtis Macnguyen’s Ivory Capital (Investment Mgmt), Ross Margolies’ Stelliam Investment Management, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
The shares of Delta Air Lines have received a positive response from hedge fund investors and insiders, which makes it a candidate poised towards growth. We recommend a buy for the shares of the airliner.
Disclosure: None
