Jim Cramer Bets Delta Air Lines, Inc. (DAL) ‘Tells A Good Story’

We recently published an article titled, 11 Stocks on Jim Cramer’s Radar Right Now. In this article, we are going to take a look at where Delta Air Lines, Inc. (NYSE:DAL) stands against other stocks on Jim Cramer’s radar right now.

In his recent episode of Mad Money, host Jim Cramer focused on the upcoming market events, emphasizing the importance of new consumer price index data alongside a series of reports as the earnings season kicks off.

Cramer pointed out that the Labor Department’s nonfarm payroll report revealed significant job growth in September, surpassing expectations. He highlighted the significant rally in stocks on Friday, a response to better-than-expected job creation figures. The U.S. economy added 254,000 jobs in September, significantly exceeding Wall Street’s estimate of 150,000. Additionally, there were upward revisions for the previous two months, with 72,000 more jobs reported for July and August combined.

Despite his initial expectation that stocks would decline as bond yields surged, Cramer noted the resilience in the market. He observed that people seemed to feel relief, thinking that a major economic downturn was not on the horizon, which prompted a flurry of buying activity in the stock market. He added, “Maybe we aren’t headed toward a landing at all.” He described the situation as quite unusual and, in his view, “quite exciting”.

He mentioned that on Wednesday, the Federal Open Market Committee will publish notes from its last month’s meeting, which could clarify the central bank’s bold choice to cut interest rates by 50 basis points. According to Cramer, Wall Street is rife with speculation about the Federal Reserve’s future actions, especially following strong labor statistics released last Friday. As speculation swirls around whether the next cut will be 25 or 50 basis points, Cramer leaned towards the belief that it would likely be 25 or nothing at all. He added:

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He also mentioned that Friday would bring the producer price index report, which, like the consumer price index, will serve as a critical indicator for the Fed’s upcoming decisions. Cramer commented:

Our Methodology

For this article, we compiled a list of 11 stocks that were mentioned by Jim Cramer during his episode of Mad Money on October 4. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Jim Cramer Bets Delta Air Lines, Inc. (NYSE:DAL) ‘Tells A Good Story’

Delta Air Lines, Inc. (NYSE:DAL)

Number of Hedge Fund Holders: 51

Delta Air Lines, Inc. (NYSE:DAL) is a leading provider of scheduled air transportation services for passengers and cargo, operating on a vast scale both domestically and internationally. The company’s domestic network is centered around key hubs, including Atlanta, Minneapolis-St. Paul, Detroit, and Salt Lake City. Talking about the company, Cramer commented:

Delta Air Lines, Inc. (NYSE:DAL) also maintains coastal hubs in major cities such as Boston, Los Angeles, New York-LaGuardia, New York-JFK, and Seattle. Internationally, the airline has established a strong presence with hubs in notable cities like Amsterdam, Bogotá, Lima, Mexico City, London Heathrow, Paris-Charles de Gaulle, São Paulo, Seoul-Incheon, and Tokyo.

It is worth noting that the stock is trading at a forward PE multiple of 8.04, an over 60% discount compared to its sector median.

Additionally, Delta’s (NYSE:DAL) President Glenn Hauenstein has addressed investors regarding improvements in capacity management. He commented that the excess capacity seen during the summer began to resolve itself in August, which positively impacted revenue trends as the airline moved into the fall, typically considered an off-peak season.

During the second quarter, the revenue was 5.4% higher than 2023. It was owed to strong demand and best-in-class operations. Revenue diversification was a key factor, with premium offerings, loyalty programs, and various other revenue sources accounting for 56% of the overall revenue.

Overall, DAL ranks 10th on our list of stocks on Jim Cramer’s radar right now. While we acknowledge the potential of DAL as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DAL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure: None. This article is originally published at Insider Monkey.