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Why Delta Air Lines Is Poised to Pull Back

By Brian D. Pacampara, CFA - Apr 2, 2013 at 11:40AM

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Market-lagging returns could be written in this 1-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, airline operator Delta Air Lines (DAL 1.93%) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Delta and see what CAPS investors are saying about the stock right now.

Delta facts

Headquarters (founded)

Atlanta (1924)

Market Cap

$13.8 billion

Industry

Airlines

Trailing-12-Month Revenue

$36.7 billion

Management

CEO Richard Anderson (since 2007)

CFO Paul Jacobson (since 2012)

Return on Capital (average, past 3 years)

11.1%

Cash/Debt

$3.4 billion / $13.2 billion

Competitors

Southwest Airlines

United Continental

US Airways

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 41% of the 937 members who have rated Delta believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, gameguru, succinctly summed up the Delta bear case for our community:

The recent run-up seems unsupported by fundamentals. Oil prices likely can and will go higher. TSA delays and FAA furloughs may reduce traffic. Recent weather problems will hurt traffic. Delta continues trying to expand its already expansive routes, which is usually a recipe for capital loss in this space.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

Delta Air Lines, Inc. Stock Quote
Delta Air Lines, Inc.
DAL
$41.62 (1.93%) $0.79

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