Is Delta Air Lines, Inc. (DAL) A Good Stock To Buy?

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Delta Air Lines, Inc. (NYSE:DAL).

Is DAL a good stock to buy? Delta Air Lines, Inc. (NYSE:DAL) has seen an increase in hedge fund interest lately. Delta Air Lines, Inc. (NYSE:DAL) was in 50 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 109. Our calculations also showed that DAL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s analyze the key hedge fund action regarding Delta Air Lines, Inc. (NYSE:DAL).

Zilvinas Mecelis of Covalis Capital

Do Hedge Funds Think DAL Is A Good Stock To Buy Now?

At Q3’s end, a total of 50 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from one quarter earlier. On the other hand, there were a total of 43 hedge funds with a bullish position in DAL a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the most valuable position in Delta Air Lines, Inc. (NYSE:DAL). Citadel Investment Group has a $276.6 million call position in the stock, comprising 0.1% of its 13F portfolio. On Citadel Investment Group’s heels is Suzi Nutton (CEO) of Lansdowne Partners, with a $171.4 million position; the fund has 8.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Paul Reeder and Edward Shapiro’s PAR Capital Management, Noam Gottesman’s GLG Partners and Mike Masters’s Masters Capital Management. In terms of the portfolio weights assigned to each position Lansdowne Partners allocated the biggest weight to Delta Air Lines, Inc. (NYSE:DAL), around 8.08% of its 13F portfolio. Covalent Capital Partners is also relatively very bullish on the stock, setting aside 5.66 percent of its 13F equity portfolio to DAL.

Now, key hedge funds have jumped into Delta Air Lines, Inc. (NYSE:DAL) headfirst. Renaissance Technologies, assembled the most outsized position in Delta Air Lines, Inc. (NYSE:DAL). Renaissance Technologies had $81.5 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also made a $29.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Louis Bacon’s Moore Global Investments, and Zilvinas Mecelis’s Covalis Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Delta Air Lines, Inc. (NYSE:DAL) but similarly valued. We will take a look at Skyworks Solutions Inc (NASDAQ:SWKS), Bill.com Holdings, Inc. (NYSE:BILL), Li Auto Inc. (NASDAQ:LI), Laboratory Corp. of America Holdings (NYSE:LH), UiPath Inc. (NYSE:PATH), AppLovin Corporation (NASDAQ:APP), and Weyerhaeuser Co. (NYSE:WY). This group of stocks’ market values resemble DAL’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.9 hedge funds with bullish positions and the average amount invested in these stocks was $1889 million. That figure was $1218 million in DAL’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Li Auto Inc. (NASDAQ:LI) is the least popular one with only 20 bullish hedge fund positions. Delta Air Lines, Inc. (NYSE:DAL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DAL is 53.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately DAL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DAL were disappointed as the stock returned -15% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.