Is Delta A 'Buy The Dip' Opportunity?
Jeff Yaede was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.
TraderMinute Founder Jeff Yaede talked about Delta Air Lines, Inc. (NYSE: DAL) Friday on the show.
Yaede noted that many airline stocks has been hit hard in recent days and how in Delta’s previous earnings release, it was clear the company would seek to drop low-margin markets while increasing dividends and share buy-backs.
While multiple factors were at work during last week’s price action, Yaede noted that Southwest Airlines Co (NYSE: LUV) would increase capacity and expand into low-margin markets where Delta had been pulling out, which created a buying opportunity for Delta's shares.
Alaska Air Group, Inc. (NYSE: ALK) and Hawaiian Holdings, Inc. (NASDAQ: HA) were also cited as possible buying opportunities, however, Yaede said he would stay away from Southwest Airlines if they move in the direction of pursuing markets at the expense of margins.
Yaede added that the U.S. airline business had been strong and that growth for the industry would come from international routes.
While many experts might not be fans of the stock, Yaede said that Delta was his favorite among airlines and he thought it would perform well versus peers.
“If you’re going to play the [airline] group, I think Delta is probably going to be one of the bigger outperformers of the larger airlines overall,” Yaede concluded.
Delta Air Lines, Inc. recently traded at $43.32, down 0.98 percent.
Listen to the show here:
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