David Taylor, a director at Delta Air Lines (DAL), recently bought 5,000 shares. The buy increased his holdings by 9 percent, and came to a total cost of $167,805.
This marks the first insider buy since January, when another director bought 12,880 shares at a cost of just over $496,000. A few company executives have been sellers of shares so far this year, including the company’s President, on two separate occasions.
Overall, insiders own 0.3 percent of the airline’s shares.
Delta shares have slid nearly 20 percent over the past year, performing nearly twice as poorly as the S&P 500 over the same time frame. While revenues are up nearly 37 percent, reflecting a return to pre-pandemic travel levels, higher costs, particularly fuel, have weighed on profitability.
Even though the company’s profit margin has barely hit 3 percent, the drop in shares has taken the stock to 6 times forward earnings. Even if the economy continues to slow, that still makes the airline a value play at today’s prices.
Action to take: Despite some rallies and drops, shares appear to have hit a low back in October and are trending higher. Shares don’t pay a dividend, but they could move higher than the S&P 500 going forward thanks to stronger travel trends or lower energy prices.
For traders, both the short and medium-term trend is higher. The June $38 calls, last going for about $1.04, offer mid-double-digit returns in the next few weeks as that trend continues.
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 of the companies mentioned in this article.