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Delta Air Lines, Inc. (NYSE:DAL): Are Hedge Funds Right About This Stock?

Delta Air Lines, Inc. (NYSE:DAL) was in 56 hedge funds’ portfolio at the end of the fourth quarter of 2012. DAL has seen an increase in enthusiasm from smart money in recent months. There were 45 hedge funds in our database with DAL holdings at the end of the previous quarter.

Delta Air Lines, Inc. (NYSE:DAL)

At the moment, there are tons of methods market participants can use to monitor Mr. Market. Some of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the top fund managers can trounce the market by a healthy margin (see just how much).

Equally as integral, bullish insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are many reasons for an executive to downsize shares of his or her company, but just one, very clear reason why they would buy. Many empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know what to do (learn more here).

With these “truths” under our belt, we’re going to take a gander at the latest action surrounding Delta Air Lines, Inc. (NYSE:DAL).

What have hedge funds been doing with Delta Air Lines, Inc. (NYSE:DAL)?

Heading into 2013, a total of 56 of the hedge funds we track were long in this stock, a change of 24% from the third quarter. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly.

According to our comprehensive database, Lansdowne Partners, managed by Paul Ruddockáand Steve Heinz, holds the largest position in Delta Air Lines, Inc. (NYSE:DAL). Lansdowne Partners has a $418 million billion position in the stock, comprising 6.9% of its 13F portfolio. Sitting at the No. 2 spot is Wayzata Investment Partners, managed by Patrick Halloran, which held a $407 million position; 3.4% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Ken Heebner’s Capital Growth Management, Paul ReederáandáEdward Shapiro’s PAR Capital Management and John Griffin’s Blue Ridge Capital.

With a general bullishness amongst the heavyweights, key money managers have jumped into Delta Air Lines, Inc. (NYSE:DAL) headfirst. Capital Growth Management, managed by Ken Heebner, established the largest position in Delta Air Lines, Inc. (NYSE:DAL). Capital Growth Management had 132 million invested in the company at the end of the quarter. Clint Carlson’s Carlson Capital also initiated a $28 million position during the quarter. The other funds with brand new DAL positions are Donald Chiboucis’s Columbus Circle Investors, Stanley Druckenmiller’s Duquesne Capital, and Kenneth Mario Garschina’s Mason Capital Management.

Insider trading activity in Delta Air Lines, Inc. (NYSE:DAL)

Bullish insider trading is best served when the primary stock in question has seen transactions within the past half-year. Over the latest six-month time frame, Delta Air Lines, Inc. (NYSE:DAL) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

With the results exhibited by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Delta Air Lines, Inc. (NYSE:DAL) is no exception.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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