Insider Buying

Insider Buying Report: United Airlines Holdings Inc (UAL:US)

United Airlines Holdings Inc
(UAL:US)
12 months:
-31.85%
Activity:
Bullish
Pattern:
Purchase from Independent Director
News:
Q1 results
United Airlines Holdings Inc
(UAL:US)
12 months:
-31.85%
Activity:
Bullish
Pattern:
Purchase from Independent Director
News:
Q1 results

Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a number of reasons. Yet they only buy stock for one reason – they expect it to rise.

Here, we are going to highlight insider buying at United Airlines Holdings Inc (UAL:US). United Airlines Holdings is a US-based airline company. The company’s wholly-owned subsidiary, United Airlines, is one of the largest carriers in the world, and operates domestic flights in the US via a number of hubs spread throughout the country. It also operates international flights globally and has its main international hub in Tokyo. It’s listed on the Nasdaq Stock Exchange and currently has a market capitalization of $12.3 billion.

United Airlines Holdings Inc: Insider Buying

Our insider transaction data shows that between June 2 and June 13, a director at United Airlines Holdings, Edward Shapiro, purchased 100,000 UAL shares at an average price of $42.36 per share. This purchase cost the insider a little over $4.1 million. This was his first purchase of UAL stock since he was appointed as a director back in 2020.

Experienced Investor

This insider buying at United Airlines is interesting for two reasons.

Firstly, this trade represents the first purchase from an insider at United Airlines for over a year. It is noteworthy that having not bought stock since joining the company in 2020, Mr. Shapiro has spent over $2 million on UAL shares. This suggests that he is very confident the market is currently undervaluing the stock.

Secondly, Mr. Shapiro has a strong financial background, which means that he is likely to be very capable of accurately assessing the true worth of the company. Previously, he was a Managing Partner at Par Capital Management for close to 20 years. He has also been employed as an analyst at Morgan Stanley and was a Vice President at Wellington Capital Management.

Moving Back to Profitability

United Airlines recently produced a reassuring set of Q1 numbers and advised that it believes that it will move back to profitability in the second quarter of 2022.

Encouragingly, capacity in Q1 was only 19% lower than it was in Q1 2019, and capacity is continuing to increase as demand improves. Total operating revenue has continued to improve and came in at $7.6 billion for the quarter. This was only 21% lower than the figure achieved in Q1 2019. The airline carrier also noted that it had $20 billion of liquidity available at the end of the first quarter and that total debt declined by over $700 million.

Looking ahead, United said it expects to achieve a 10% operating margin in the second quarter and achieve solid profitability. It added that it is seeing strong demand and that business travelers and long-haul flyers are returning at a fast pace.

"The demand environment is the strongest it's been in my 30 years in the industry – and United and its customers will benefit more than any other airline. We're now seeing clear evidence that the second quarter will be an historic inflection point for our business. It leaves me more optimistic than ever about United's future," said United Airlines CEO Scott Kirby.

Given this extremely strong outlook statement and reassuring Q1 update, we see the recent insider buying at the company as bullish. The share price has been weak over the last twelve months and it would appear that the Independent Director is viewing it as a good opportunity to pick up a large chunk of stock at a low price.

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