David Taylor, a director at
Delta Airlines (DAL), recently added 10,000 shares. The buy increased his holdings by just over 21 percent, and came to a total price of just over $293,000.
This marks the second buy at the company this year, also from a director. Company executives have been sellers of shares this year, as high oil prices have weighed on returns. Over the past three years, insider buying has been fairly steady after drops, with insider sales rising after a rally.
Overall, insiders at the company own about 0.3 percent of shares.
The airline is down about 22 percent in the past year. Profitability has been light, as the company has yet to reach pre-pandemic traffic and has had to contend with rising fuel costs as oil prices have soared. However, with oil prices easing, the company looks more attractive at under 10 times forward earnings estimates.
Action to take: With shares trading just under 0.5 times price to sales, they’re at their cheapest valuation since the pandemic selloff. Shares can likely rise with fuel costs coming down. The stock doesn’t currently pay a dividend.
For traders, the January $40 calls, last going for about $1.55, look like a reasonable trade here. The market has trended up in recent weeks, so traders likely have a few more weeks to profit from rising prices in the market. These options can potentially deliver high double-digit returns.
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.