We recently published a list of Jim Cramer on These 7 Travel and Leisure Stocks. In this article, we are going to take a look at where Delta Air Lines, Inc. (NYSE:DAL) stands against other travel and leisure stocks that Jim Cramer discusses.
On Tuesday, Jim Cramer, the host of Mad Money, discussed the recent struggles in the travel sector and shared where he sees potential opportunities for investors.
“After weeks of carnage, we finally get a decent session thanks largely to a cooler-than-expected consumer price index rating but this is still an insanely volatile market as you know, as President Trump keeps ramping up the trade wars. Still, at this point, so many high-quality stocks have come down so much that we’re bound to find some great buying opportunities.”
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Cramer pointed to the travel sector, which had been a darling of Wall Street but has since lost much of its luster. Once considered a prime sector during the bull market, it has quickly fallen out of favor. Still, Cramer sees potential in the sector, especially for airlines, as a weaker economy is not necessarily all bad news for them. For one, he highlighted that falling oil prices could lead to significant savings on fuel costs.
Cramer said that he does not think the recent challenges facing airlines are catastrophic for the industry. With airline stocks down between 30% to 40% from their highs, he sensed an opportunity, although he cautioned investors to be selective. Furthermore, he noted that executives from top airlines have indicated that many of the industry’s structural advantages, such as reduced capacity this year, remain intact.
Cramer also turned his attention to the cruise line sector, which has experienced significant declines, with stocks for the major players down by 25% to 35% from their recent peaks. He said that he understood the reasons behind this drop. He noted that in addition to broader concerns about consumer spending, new Commerce Secretary Howard Lutnick recently threatened the cruise lines with higher taxes. Cramer emphasized that many of these cruise lines are domiciled overseas and, as a result, do not pay U.S. taxes.
“Here’s the bottom line: Even with all of this trade war turmoil, I’m not ready to give up on the beaten-down travel space, which has been so good for so long and that’s why I like United Airlines, Royal Caribbean, and Airbnb. I think all are worth buying right here because it’s kind of an amazing bout of weakness after a real big run.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on March 12. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the fourth quarter of 2024, which was taken from Insider Monkey’s database of over 1,000 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 84
Delta Air Lines, Inc. (NYSE:DAL) was mentioned during the episode, and here’s what Cramer had to say:
“Now for those of you who haven’t been paying attention, this week Delta Airlines slashed its first-quarter earnings outlook, citing, ‘the recent reduction in consumer and corporate confidence caused by increased macro uncertainty’, which they say drove ‘softness and domestic demand’ in recent weeks. Now for a long time, Delta was the best of the airlines so you really don’t want to hear that kind of commentary from them. Now these guys cut their guidance ahead of an appearance at the JPMorgan Industrials conference on Tuesday.”
Cramer highlighted that many airline stocks have dropped by 35 to 40% in recent weeks, making them intriguing investment opportunities. Despite the sharp decline, Cramer believed the overall news about the industry isn’t as bad as it may seem. He added:
“Let’s start with Delta, which kicked things off with this guidance cut. Monday night, Delta CEO Ed Bastian spoke with CNBC’s Phil LeBeau on Closing Bell that night and explained that the domestic, corporate, and consumer spending ‘started to stall’ in February, mostly due to lower consumer confidence. But he also said he believes this weakness is transitory… Bastian is pretty confident we’re not headed for a real recession.
Delta cut the revenue growth forecast from 8% to 4%… It is not great but in a recession, they, they’d be down double digits. Bastian also noted that some of the weakness came after a couple of high-profile air safety instances.”
Delta Air Lines, Inc. (NYSE:DAL) is an airline that provides passenger and cargo services across a broad range of domestic and international routes.
Overall, DAL ranks 1st on our list of travel and leisure stocks that Jim Cramer discusses. While we acknowledge the potential of DAL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.