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United Continental Holdings Inc (UAL): Hedge Fund Sentiment Points to Friendlier Skies in 2016

Most airline stocks enjoyed a great run over the past several years, until 2015. The Amex Airline Index is down by double digits over the past 12 months and many technically-oriented investors believe the airline industry has entered a bear market. It is widely known that airlines are highly dependent upon global economic conditions, which explains their poor performance throughout 2015. However, these somewhat cyclical securities have embarked on a steady upward trend since early February of this year, which means that the much-scrutinized bear market may have run its course for now. With that in mind, let’s take a closer look at what the funds tracked by Insider Monkey think about United Continental Holdings Inc (NYSE:UAL) in this article.

United Continental Holdings Inc (NYSE:UAL) was in 73 hedge funds’ portfolios at the end of December. UAL shareholders have witnessed an increase in support from the world’s most elite money managers recently. There were 70 hedge funds in our database with UAL holdings at the end of the previous quarter. At the end of this article we will also compare UAL to other stocks including Electronic Arts Inc. (NASDAQ:EA), AmerisourceBergen Corp. (NYSE:ABC), and HP Inc. (NYSE:HPQ) to get a better sense of its popularity.

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At the beginning of January 2015, two of the largest shareholders of United Continental Holdings Inc (NYSE:UAL) formally declared activist positions in the company. Paul Reeder’s PAR Investment Partners L.P., which currently owns 14.13 million shares of the third-biggest U.S. air carrier by traffic, and Brad Gerstner’s Altimeter Capital Management, which owns 11.50 million shares of the company, formed an activist group earlier this year and intend to continue to engage in discussions with the company’s management, Board of Directors, and other parties regarding United Continental’s business, management, capital structure, capital allocation, and other issues. Just recently, United Continental Holdings Inc (NYSE:UAL) announced that Chief Executive Officer Oscar Munoz, who suffered a heart attack in October 2015 soon after being appointed as Chief Executive, will return to work full-time next week. Although the CEO has had very little time to make significant changes at the company, many investors believe that Mr. Munoz already managed to trigger some positive changes at the company as far as the relationship between its management and employees go, as well as in improving the company’s reputation. The shares of United Continental are 1% in the green year-to-date, thanks to the 23% gain registered in the past month.

With all of this in mind, let’s take a gander at the key action surrounding United Continental Holdings Inc (NYSE:UAL), as well as examine the company’s recent financial performance. 

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