Which High Flyers Are Hedgies Holding? – Delta Air Lines, Inc. (DAL), Southwest Airlines Co. (LUV)

Page 1 of 2

The airline industry is known for being among the most competitive and challenging businesses out there.  Some well-known 20th century airlines no longer operate today, such as ATA Airlines.  Others operate under bankruptcy protection, like Delta Air Lines, Inc. (NYSE:DAL), and regional airliner Southwest Airlines Co. (NYSE:LUV) has stayed competitive in the business by keeping operations focused on a specific niche.

Delta Air Lines, Inc. (NYSE:DAL)

It’s no secret that we are fans of mimicking the smart money. We’ve recently teamed up with MarketWatch to create the Billionaire Hedge Fund Index to measure how well hedge funds can pick stocks. The Index tracks more than 40 billionaire fund managers, and after a full year of its existence, the results speak for themselves. In 2012, this index returned 24.3% vs. 16.0% for the S&P 500 ETF. That’s an outperformance of 8.3 percentage points (learn more about how to use this market-dominating strategy).

Consequently, we’re going to look at a few different airliners what some hedge funds are doing with their holdings.

Let’s check out Delta Airlines first.  Delta operates globally using the hub-and-spoke system, operating in New York, Amsterdam, Tokyo, and many other cities.  The stock traded at $14.83 at the beginning of 2008.  It currently trades around $13.80 and is up from around $12.00 at the beginning of 2013.  Revenue has grown at a compounded rate of over 15.5% since 2008.  Net income has been positive since 2010 and grew over 40% in 2011.  Popular fund managers such as George Soros (see Soros Fund Management’s top holdings) and David Tepper keep a good chunk of their 13F portfolios in Delta.

Smaller airliners, such as Southwest Airlines, still pack a punch.  Known for their “sex sells seats” motto in the 1970s and their 40 straight years of profitability shortly after starting, Southwest has been one of the most interesting players in the business.  Before the recession, Southwest traded between $11-$18 per share, then traded below $5 in 2009.  Currently their stock trades over $11 per share.  The stock has grown a little under 10% per year from 2008 lows around $7.  Though still underperforming Delta over the same period, the company also pays a 0.40% annual dividend yield.

Sales shrank slightly by 6% in 2009, but grew at a rate of over 18% per year from 2010-2012.  Southwest Airlines was Jim Simons’ 253rd biggest investment in 3Q 2012, placing it in the top 10% of his holdings.  Simons has operated his hedge fund, Renaissance Technologies, so successfully that he is currently ranked the 31st wealthiest man in the United States (see Simons’ newest stock picks).

Who’s the best of the rest?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!