In this article we discuss the 5 best airline stocks to buy now. If you want to read our detailed analysis of the airline industry, go directly to the 10 Best Airline Stocks to Buy Now.
5. Alaska Air Group, Inc. (NYSE: ALK)
Number of Hedge Fund Holders: 32
Alaska Air Group, Inc. (NYSE: ALK) is a provider of passenger and cargo air transportation services in 115 destinations throughout the US and North America. The company ranks 5th on our list of the best airline stocks to buy now
On May 24th, Alaska Air Group, Inc. (NYSE: ALK) raised its cash flow guidance for the second quarter to $550 million – $650 million from $450 million to $550 million, because of growing demands for future air travel. The company also said it would be boosting its fleet numbers by adding 30 mainline and regional aircraft in the coming years, because of the expectation of domestic travel levels to increase by 2022. New additions to the fleet may include 17 new Embraer 175 jets in 2022 and 2023 and 13 Boeing 737-9 MAX planes in 2023 and 2024.
In its first quarter of 2021 report, Alaska Air Group, Inc. (NYSE: ALK) reported EPS of -$3.51 versus estimates of -$3.64 and revenue valued at $797 million. The stock has gained 26.07% in the past 6 months and 28.57% year to date.
By the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in Alaska Air Group, Inc. (NYSE: ALK). The total value of their stakes was roughly $587 million. This is compared to 35 hedge funds holding stakes in the company worth about $552 million.
White Brook Capital, an investment management firm, mentioned Alaska Air Group, Inc. (NYSE: ALK) in its first-quarter 2021 investor letter. Here’s what they said:
“Despite initiating a position in the fourth quarter, Alaska Airlines Group, Inc (ALK) was sold during the first quarter. The Alaska Airlines investment was envisioned to be a long-term investment, but the stock price appreciated more quickly than expected. Like many other “re-open trades”, the value of the company including its debt now exceeds the value pre-pandemic. For that to be reasonable I’d have to believe:
1) The company/industry had too little debt and by adding debt they’ve better optimized their balance sheet for equity returns while still maintaining downside resiliency;
2) The company/industry’s profitability will be better moving forward than it was pre-pandemic and therefore warrant a higher multiple; and/or
3) The company/industry was significantly mispriced before the pandemic.
The first was true of Alaska Airlines pre-pandemic, but the certainty one can have about the second and third is not high enough to compel continued investment at today’s prices. The intended long-term position turned into a short-term trade with an exceptional IRR.”
4. American Airlines Group Inc. (NASDAQ: AAL)
Number of Hedge Fund Holders: 32
American Airlines Group Inc. (NASDAQ: AAL) is a network air carrier that provides scheduled air transportation services for passengers and cargo in the US and internationally. As of December 2020, the company’s fleet comprised 855 aircraft. It ranks 4th on our list of the best airline stocks to buy now.
By the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in American Airlines Group Inc. (NASDAQ: AAL). The total value of their stakes was roughly $561 million. This is compared to 37 hedge funds holding stakes in the company worth about $329 million.
3. United Airlines Holdings, Inc. (NASDAQ: UAL)
Number of Hedge Fund Holders: 38
United Airlines Holdings, Inc. (NASDAQ: UAL) is a company providing transportation services in the US and internationally, through its subsidiaries. It transports people and cargo and also sells fuel. The company ranks 3rd on our list of the best airline stocks to buy now.
On June 10th, Bloomberg reported that United Airlines Holdings, Inc. (NASDAQ: UAL) is considering the purchase of at least 100 737 MAX jets from Boeing, while the company is trying to upgrade its fleet. The report led to the stock rising in its aftermath. In its first-quarter report, United Airlines Holdings, Inc. (NASDAQ: UAL) reported EPS of -$7.5 versus estimates of -$7.12 and revenue was $3.22 billion. The stock gained 24.65% in the past 6 months and 31.92% year to date.
By the end of the first quarter of 2021, 38 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in United Airlines Holdings, Inc. (NASDAQ: UAL). The total value of their stakes was roughly $1.02 billion. This is compared to 52 hedge funds holding stakes in the company worth about $1.09 billion.
2. Delta Air Lines, Inc. (NYSE: DAL)
Number of Hedge Fund Holders: 50
Delta Air Lines, Inc. (NYSE: DAL) is a provider of scheduled air transportation services for passengers and cargo alike in the US and internationally. The company’s fleet comprises roughly 1,100 aircraft and it ranks 2nd on our list of the best airline stocks to buy now.
By the end of the first quarter of 2021, 50 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in Delta Air Lines, Inc. (NYSE: DAL). The total value of their stakes was roughly $1.09 billion. This is compared to 58 hedge funds holding stakes in the company worth about $1.06 billion.
1. Southwest Airlines Co. (NYSE: LUV)
Number of Hedge Fund Holders: 52
Southwest Airlines Co. (NYSE: LUV) is a passenger airline company that provides scheduled air transportation services in the US. In December 2020, the company had a fleet of 718 Boeing 737 aircraft and served 107 destinations in 40 states in the US alongside near-international countries. The company ranks 1st on our list of the best airline stocks to buy now.
On June 8th, Southwest Airlines Co. (NYSE: LUV) upped their order of Boeing MAX 7 jets by adding 34 more planes due to improvements in travel demands. The company also offered guidance saying that it expected sequential improvements in operating revenues for June due to more leisure passenger traffic and rising fares. In their first-quarter 2021 report, Southwest Airlines Co. (NYSE: LUV) reported an EPS of -$1.72 versus estimates of -$1.85 and revenue was $2.05 billion. The stock gained 20.5% in the past 6 months and 22.54% year to date.
By the end of the first quarter of 2021, 52 hedge funds out of the 866 tracked by Insider Monkey for the quarter held stakes in Southwest Airlines Co. (NYSE: LUV). The total value of their stakes was roughly $747 million. This is compared to 55 hedge funds holding stakes in the company worth about $757 million.
ClearBridge Investments, an investment management firm, mentioned Southwest Airlines Co. (NYSE: LUV) in its first-quarter 2021 investor letter. Here’s what they said:
“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”
You can also take a peek at the Top 10 Aircraft Manufacturers in the World and 20 Best Airlines in the World in 2021.
