Delta Air Lines (NYSE:DAL) stock is in focus following an order from Boeing (NYSE:BA) and an insider purchase. Delta announced this morning that it had purchased 100 737 Max 10 planes with an option to purchase 30 more. These planes will be the company’s first order from Boeing in over a decade. In addition, the planes will be 20% to 30% more fuel-efficient than the planes they are replacing. Deliveries of the order are expected to begin in 2025.
The order is worth an estimated $13.5 billion at list prices, although large orders often receive discounts. However, the 737 Max plane family has had its fair share of controversy in recent years. The 737 Max was grounded for about 18 months following two fatal crashes in 2018 and 2019 that killed 346 people. The grounding was lifted in November 2020 following reviews by regulatory agencies. Meanwhile, the Max 10 model has not yet received regulatory approval, although Boeing expects to win approval before the end of the year.
With that in mind, let’s get into the details of the insider purchase.
DAL Stock: Director David Taylor Purchases Shares
On July 14, Director David Taylor purchased 10,000 shares of DAL at an average price of $29.31 per share. After the purchase, Taylor now directly owns 43,010 shares. He also indirectly owns 14,000 shares through a grantor retained annuity trust (GRAT). Taylor’s purchase marks only the second Delta insider purchase on the open market this year. The only other purchase is attributed to Director Greg Creed. On April 22, Creed purchased 11,000 shares at an average price of $44.03 per share.
Taylor’s purchase is interesting, as it preceded Delta’s Boeing purchase announcement. While the purchase will cost Delta a pretty penny, the company likely expects increased demand in the future. Furthermore, the fuel-efficient 737 Max 10 planes will help Delta save money on fuel down the line.
Who Else Is Betting Big on Delta Air Lines?
Tracking institutional ownership is important, as these large funds provide liquidity and price support for stocks and their respective companies. During the first quarter, 934 funds reported owning DAL, a decrease of 17 funds from the prior quarter. Still, the institutional put/call ratio lies at 0.74, down from 0.97 during fourth quarter of 2021. This means that more funds own call options against DAL than put options. With that in mind, let’s take a look at the five largest shareholders:
- Vanguard: 68.23 million shares.
- BlackRock (NYSE:BLK): 37.85 million shares.
- Capital World Investors: 22.08 million shares.
- State Street: 21.77 million shares.
- Primecap Management: 19.09 million shares.
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.
