The US economy is emerging from Covid and growing at the fastest rate in nearly forty years. While still well below full capacity, travel and leisure are rebounding quickly, asserts Adam Johnson, editor of Bullseye Brief.
Wynn Resorts (WYNN) receives 5,000 reservations per day, and US carriers report non-business volumes have returned to within 90% of pre-Covid levels.
I’m already long several stocks which capitalize on economic normalization, and now I’m adding another… an airline I’ve bought before. Recent volatility has grounded it near my Buy Zone, and having already kicked the tires, I believe it’s ready to takeoff once again.
Delta Air Lines (DAL) is the strongest US operator, and the only airline I’ve ever owned. I have made money in the stock twice since 2019, and I’m inclined to try for a third time… at the right price. I will buy shares near $40, 10% below where it’s trading and concurrent with the 12-month trend line.
Airlines are a tricky business, but Delta CEO Ed Bastian is an exceptional leader, adapt at trimming the aircraft for maximum efficiency at speed.
In additional to industry-leading fare segmentation that maximizes profits in the cabin (eg paying extra for an aisle, checked bag, early seat assignment, etc.), Delta’s frequent flyer program with American Express (AXP) and its third-party maintenance services with other carriers generate hundreds of millions as standalone businesses.
Before Covid, Delta was the industry’s most profitable airline, and since Covid the company has fortified its balance sheet with the most amount of cash. Delta is first-class operator, and my top pick as travel returns.