Delta Air Lines Inc (DAL-N)

They reported last Thursday, reporting a small revenue miss but an earnings beat, but wouldn't reaffirm their full-year forecast, because the economy is too uncertain. DAL is being cautious, given how the White House changes its trade policy on a dime.

They report Wednesday, and he expects awful numbers, because the company has warned the street. Is busy still weak or weaker since their last report? He worries that the travel bull market is completely done, especially if we go into a recession.

They just cut guidance, because the US consumer is starting to stall, due to weaker consumer guidance. They cut their revenue forecast from 8% to 4%, but in a recession they'd be down double digits. Stock weakness also happened after two high-profile plane crashes

Airlines are under pressure right now, but will do well this summer with strong travel demand.

Fuel prices are now low, there's no labour contracts up for negotiation and plane travel demand is high. Also, the PE is now attractive. His pick is DAL in this space. They will probably earn $7.50 this year and $8.50 next. Make sense to put a 10x multiple on it.

It reports Thursday, Airlines are no longer building capacity, but are keeping capacity tight and prevent create price wars. Airline profits and demand remain  robust.

This and UAL were momentum plays, and he chased when the momentum began to build and he's been rewarded. True, he was skeptical about their fundamentals.

Despite a huge run and despite a projected decline in overall airline capacity, DAL trades at only 10x PE, cheap, half the S&P's PE. Will continue to do well as long as it doesn't add too many new flights.