Assessing 2Q15 Institutional Investor Activity in American Airlines

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Assessing 2Q15 Institutional Investor Activity in American Airlines PART 1 OF 6

Institutional Holders’ Activity in American Airlines in 2Q15

Institutional investors shied away from American Airlines

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

While 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 10.08% to date.

Institutional Holders&#8217; Activity in American Airlines in 2Q15

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Airline companies that have experienced 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.

American Airlines saw additions to, or new positions, in the portfolios of 329 institutional investors in 2Q15 against position decreases or liquidations from 318 asset management companies. During the last quarter, overall shares held by institutional investors in Delta Air Lines fell by ~40 million, or by 7.93%, to 524 million.

Sector performance

Airline companies fall under the transportation sector, which 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 15.69% year-to-date, compared to the SPDR S&P 500 ETF (SPY), which fell 3.49% over the same period.

The iShares Transportation Average ETF (IYT) tries to replicate the performance of the Dow Jones Transportation Average, and 16.5% of its portfolio contains airline stocks.


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