Hedge Funds Are Bullish on These Airline Stocks

The fan club of United Continental Holdings Inc (NYSE:UAL) gained a few new members over the fourth quarter, as the number of top funds invested in the company increased to 73 by the end of December, up from 70 a quarter earlier. Cliff Asness is betting on United Continental Holdings Inc (NYSE:UAL) as well, having also increased his investment in it over the quarter, by 50% to 6.14 million shares worth in the region of $352 million. United Continental Holdings Inc (NYSE:UAL) recently announced an increase in its share repurchase program for the first quarter, taking it to $1.5 billion, roughly twice the size initially announced. With shares currently trading at $58.25, the stock has returned to green territory for the year, trading up by 4%.

Hedge fund sentiment towards American Airlines Group Inc (NASDAQ:AAL) stayed roughly the same during the fourth quarter, as the number of long positions reported as of the end of December inched down to 76 from 77 as of the end of September. Phill Gross and Robert Atchinson are very optimistic about the prospects of American Airlines Group Inc (NASDAQ:AAL), having tripled their holding of the stock over the fourth quarter to 3.36 million shares valued at $142 million. American Airlines Group Inc (NASDAQ:AAL) is currenlty trading at a trailing Price-to-Earnings (P/E) ratio of 3.77, significantly lower than the industry average P/E of 10.00. Shareholders are also entitled to an annual dividend of $0.40 per share, which represents a yield of 0.95%.

According to our database, roughly 20% of Delta Air Lines, Inc. (NYSE:DAL)‘s common stock was held by 108 elite funds in our database at the end of December, which amounts to 14% of the funds tracked by Insider Monkey. Alex Snow, the manager of Lansdowne Partners, is still heavily invested in Delta Air Lines, despite a 9% reduction in his stake. At the end of December, Lansdowne Partners held 26 million shares worth $1.32 billion. David Tepper is also betting big on this stock, having increased his investment by 21% to 7.32 million shares valued at $371 million. For the fourth quarter, Delta Air Lines, Inc. (NYSE:DAL) reported revenue of $9.50 billion, down by 1.5% year-over-year, along with adjusted earnings of $1.18 per share, while analysts were looking for $9.61 billion in revenue and earnings of $1.19 per share. Analysts are recommending the stock as a ‘Buy’ and have an average price target of $63.27 per share on it, which represents upside potential of roughly 30%.

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