United Airlines (NASDAQ:UAL) stock is in the spotlight following a $1.78 million insider purchase by director Edward Shapiro. This comes after the company reported its first quarterly profit since the onset of Covid-19. Still, revenue and earnings per share tallied in below consensus analyst estimates.
Revenue came in at $12.11 billion versus expectations of $12.16 billion. Furthermore, EPS came in at $1.43 while analysts were expecting $1.95. Unit revenues increased 24% compared to 2019 as demand for travel picked up.
Overall, unit costs, excluding fuel, are expected to jump between 16% and 17% year over year during Q3. Rising fuel costs have already hit its profitability. During Q2, the average price for a gallon of fuel was $4.18, compared to $1.97 a year ago. CEO Scott Kirby added:
Industry-wide operational challenges that limit the system’s capacity, record fuel prices and the increasing possibility of a global recession are each real challenges that we are already addressing.
With that in mind, let’s get into the details of Shapiro’s UAL stock purchase.
UAL Stock: Director Edward Shapiro Buys 50,000 Shares
Between July 25 and July 26, Shapiro purchased 50,000 shares of UAL at average prices ranging between $35.64 and $35.84. After the purchases, Shapiro now owns a total of 150,000 shares.
The director is the only UAL insider to have purchased shares on the open market this year. Last month, Shapiro purchased 100,000 shares at average prices ranging between $37.69 and $45.20. In July 2020, he sold 157,707 shares at an average price of $33.26, liquidating his entire position.
It’s evident from Shapiro’s recent purchase that he believes United has clear skies ahead. Insiders may sell shares for a variety of reasons, but they only buy shares for one reason: They believe the price will go up.
With that in mind, let’s take a look at who else is betting big on the airliner company.
United Airline’s Top 5 Shareholders
As of Q2, 62.2% of United’s float is held by 702 institutional investors. Meanwhile, insiders own 0.3% of all shares outstanding. So, who are the company’s top shareholders?
- Vanguard: 34.55 million shares, which equates to a 12.95% stake.
- Primecap Management: 25.01 million shares, which equates to a 9.38% stake.
- BlackRock (NYSE:BLK): 16.67 million shares, which equates to a 6.25% stake.
- State Street (NYSE:STT): 10.48 million shares, which equates to a 3.93% stake.
- U.S. Global Investors: 8.69 million shares, which equates to a 3.26% stake.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
