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Assessing 2Q15 Hedge Fund Activity for Delta Air Lines

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Assessing 2Q15 Hedge Fund Activity for Delta Air Lines PART 1 OF 6

2Q15 Delta Air Lines Institutional Investor Activity

Slightly bearish institutional investor activity in Delta Air Lines

This series will cover institutional investors’ activity in airline stocks in 2Q15, focusing specifically on Delta Air Lines (DAL). Aggregate institutional investors filings from 2Q15 reveal that the vast majority of asset managers were net bearish on airlines such as Delta Air Lines (DAL), Alaska Air (ALK), JetBlue Airways (JBLU), Allegiant Travel (ALGT), Southwest Airlines (LUV), SkyWest (SKYW), and United Continental Holdings (UAL).

While airlines such as SkyWest, Alaska Air, JetBlue, and Allegiant Travel have delivered stellar returns so far this quarter, in aggregate the industry has suffered due to fears of excess capacity, legal probes, and labor disputes. Airline stocks that are publicly traded in the United States have collectively lost 7.43% to date.2Q15 Delta Air Lines Institutional Investor Activity

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Airline companies that have witnessed double-digit declines in share prices include Spirit Airlines (SAVE), American Airlines (AAL), Virgin America (VA), Republic Airways Holdings (RJET), and United Continental Holdings (UAL). The chart above captures this year’s performance of airline companies in the United States.

Delta Air Lines saw additions to or new positions in the portfolios of 360 institutional investors in 2Q15 against position decreases or liquidations from 418 asset management companies. Overall shares held by institutional investors in Delta Air Lines fell by ~16 million during the last quarter, to 681 million.

Sector performance

Airline companies fall under the transportation sector. This sector includes other industries such as railroads, trucking, shipping, and courier service providers. On the whole, this sector has been affected by weakening volumes across subindustries and by macro headwinds. The Dow Jones Transportation Average fell by 10.41% YTD (year-to-date), compared to the SPDR S&P 500 ETF (SPY), which fell  5.11% over the same period.

The iShares Transportation Average ETF (IYT) tries to replicate the performance of the Dow Jones Transportation Average. It has a portfolio weighting of 16.5% for airlines.

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