Earning profits in a melting economy or stock is never an easy thing that many people think of, but not according to Mr. Mark Okada, co- founder and chief investment officer at Highland Capital Management, a fund managed by James Dondero. In an interview on CNBC, Mr. Okada reiterated the fact that Highland Capital had made huge investments in American Airlines Group Inc. (NASDAQ:AAL) and continues to enjoy huge returns from the same.
“We are big in American we have made a lot of money there and we are still making money there. We like it.” said Mr. Okada.
The airline industry continues to pick itself in the market seen by increased airplane orders, as well as the packing of more people and goods in airplanes and the development of fuel efficient planes. Highland Capital’s strategy to invest in airline stocks is still contentious considering they entered the space when its future was uncertain, at the peak of the economic crisis that greatly affected the travel industry. It awaits to be seen if a similar strategy can be used at the present times and still bear the same fruits as enjoyed by Highland Capital.
Highland Capital made its first investment in American Airlines Group Inc. (NASDAQ:AAL) when it was bankrupt thus the reason the hedge fund has enjoyed huge returns as the airline continues to pick itself from the economic turmoil of 2008. Mr. Okada still believes that things are set to get even better in the airline at the back of recent mergers.
Delta Air Lines, Inc. (NYSE:DAL) according to Mr. Okada is another exciting stock in terms of paying impressive dividends.
“Delta has great dividends they are paying at a very small amount of their earnings and their cash.” said Mr. Okada.
Highland Capital’s investments in the airline industry are somehow different considering many people are running away from them, due to their black history and the skyrocketing fuel prices that continue to eat on earnings.
Highland Capital Management specializes in credit investments and has 8.58% of its equity portfolio invested in American Airlines Group Inc (NASDAQ:AAL). The position is followed by Media General, Inc. (NYSE:MEG), of which the fund owns 8.72 million shares. Next on the list is Spirit Realty Capital, Inc (New) (NYSE:SRC), in which the fund has 4.2% of its equity portfolio invested.