Willie Chaing, a director at
Delta Air Lines (DAL), recently bought 10,000 shares. The buy increased his position by 71%, and came to a total cost of $438,967.
Chaing was the last buyer with a 10,000 share buy in May, representing an initial stake. Otherwise this year, a number of company executives have been sellers of shares. A director was a buyer of 20,000 shares in October last year, marking the last insider buy.
Overall, Delta Air Lines insiders own 0.3% of shares.
The airline operator is down about 6% over the past year. Shares recently fell following earnings. Rising travel demand is eating into, rather than increasing, profitability.
However, even with that recent dip, shares are still priced at less than 7 times earnings. That’s about one-third the valuation of the overall market. And energy prices have been tame, which can be a massive variable cost.
Action to take: Delta can likely find a way to improve profitability as it continues to increase its services. Shares have still been trending higher since late October, and the recent pullback could mean a new buying opportunity.
For traders, the October $50 calls, last trading for about $1.16, could see mid-to-high double-digit returns on a rebound in shares over the coming weeks. Traders likely won’t need to hold the option until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.