American Airlines Group Inc (AAL): Are Hedge Funds Right About This Stock?

Let’s now take a brief look at American Airlines Group Inc (NASDAQ:AAL)’s top-line figures of the past two years. The airline’s total operating revenue reached $40.99 billion in 2015, notably below the $42.65 billion that it reported for 2014. The company’s mainline and regional passenger revenue totaled $35.51 billion in 2015, down by 4.3% year-over-year. The decline in revenue was primarily attributable to a decrease in passenger yields due to toughening competition in certain domestic markets, as well as sustained economic weakness in Latin America, especially in Brazil and Venezuela. AAL’s mainline and regional passenger revenue per available seat mile (PRASM) was $0.1321 in 2015, which marked a decrease of 5.4% year-over-year. Nevertheless, the company’s bottom-line reached a figure of $7.61 billion in 2015, which was substantially higher than the $2.88 billion in net income generated during the prior year.

What does the smart money think about American Airlines Group Inc (NASDAQ:AAL)?

Heading into 2016, a total of 76 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 1% from one quarter earlier. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or had already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, James Dondero’s Highland Capital Management has the most valuable position of call options underlying shares of American Airlines Group Inc (NASDAQ:AAL), worth close to $222.8 million, comprising 7.1% of its total 13F portfolio. Sitting at the No. 2 spot is Stelliam Investment Management, managed by Ross Margolies, which holds a $149.4 million position; the fund has 4.5% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, and Israel Englander’s Millennium Management.

Due to the fact that American Airlines Group Inc (NASDAQ:AAL) has experienced a declination in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedgies who sold off their positions entirely last quarter. At the top of the heap, Matthew Hulsizer’s PEAK6 Capital Management dumped the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth close to $32.4 million in stock, and Anthony Bozza’s Lakewood Capital Management was right behind this move, as the fund sold off about $28.3 million worth of shares. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 fund last quarter.

On the final page, we’ll compare AAL’s popularity to stocks with a similar market cap.