Buy Delta Air Lines: Debt And Cost Reductions Are Setting The Stage For A RallyAugust 19, 2012
Airlines are a notoriously difficult business. From fuel costs to the capital intensity needed to run an airline, this industry is certainly a difficult one, unless you are Southwest LUV, which is the only airline to have never filed for bankruptcy. But despite the difficulties of the airline industry, not every company needs to be avoided. One airline in particular has an intense focus on reducing debt and controlling costs, and by doing so, it is setting the stage for a rally in its shares. And that airline is Delta DAL.
via Buy Delta Air Lines: Debt And Cost Reductions Are Setting The Stage For A Rally – Seeking Alpha.
Crude oil has had a great run over the last month after appearing like it was in free fall during the month of May. It seems likely there will be a pullback, a release of the SPR, or some trader induced volatility in the near future. One way to play a drop in oil is in the airlines stock. Fuel costs are the largest expenditure airlines have. Although many are hedged, these stocks react nicely with any significant move in the price of crude for short term traders. Coincidentally there has been insider buying in both Delta DAL and United Continental UAL. This insightful article from SA on Delta is well written.