Delta Air Lines has roughly 7.93
B in cash with 3.26
B of positive cash flow from operations. This results in cash-per-share (CPS) ratio of 13.11.
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Delta Air has an asset utilization ratio of 41.26 percent. This denotes that the company is making $0.41 for each dollar of assets. An increasing asset utilization means that Delta Air Lines is more efficient with each dollar of assets it utilizes for everyday operations.
Investing in Delta Air, just like investing in any other equity instrument, is characterized by a strong risk-return correlation. High risks mean high returns and low risk means lower expected returns. Risk management is the act of identifying and assessing the potential risk and developing strategies to minimize these risks and earn maximum possible profits while holding Delta Air along with other instruments in the same portfolio. Using conventional
technical analysis and
fundamental analysis to select individual securities into a portfolio complements risk management and adds value to overall investors' investing strategies.
Sophisticated investors, who have witnessed
many market ups and downs, anticipate that the market will even out over time. This tendency of Delta Air's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Delta Air. Your research has to be compared to or analyzed against Delta Air's peers to derive any actionable benefits. When done correctly, Delta Air's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Delta Air Lines.
How important is Delta Air's Liquidity
Delta Air
financial leverage refers to using borrowed capital as a funding source to finance Delta Air Lines ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Delta Air financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Delta Air's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Delta Air's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between Delta Air's total debt and its cash.
Delta Air Gross Profit
Delta Air Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Delta Air previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Delta Air Gross Profit growth over the last 10 years. Please check Delta Air's
gross profit and other
fundamental indicators for more details.
Delta Air Correlation with Peers
Investors in Delta can reduce exposure to individual asset risk by holding a diversified portfolio of assets in addition to a long position in Delta Air Lines. Diversification will allow for the same portfolio return with reduced risk. The correlation table of Delta Air and its peers is a two-dimensional matrix that shows the correlation coefficient between pairs of securities Delta is related in some way. The cells in the table are color-coded to highlight significantly positive and negative relationships. Each cell shows the correlation between one pair of equities and can be used to run pair trading strategies or create efficient portfolios with
your current brokerage. Please check
volatility of Delta for more details
Breaking down Delta Air Indicators
Delta Air appears to be very steady, given 3 months investment horizon.
Delta Air Lines secures Sharpe Ratio (or Efficiency) of 0.19, which denotes the company had 0.19% of return per unit of risk over the last 3 months. Our standpoint towards predicting the volatility of a stock is to use all available market data together with stock-specific
technical indicators that cannot be
diversified away. We have found twenty-seven
technical indicators for Delta Air Lines, which you can use to evaluate the future volatility of the firm. Please utilize Delta Air's Downside Deviation of 2.28,
coefficient of variation of 515.68, and Mean Deviation of 1.65 to check if our risk estimates are consistent with your expectations.
Delta Air implied volatility may change after the hike
Delta Air new risk adjusted performance upsurges over 0.23. Delta Air Lines currently demonstrates below-average downside deviation. It has Information Ratio of 0.09 and Jensen Alpha of 0.17. However, we advise investors to further question Delta Air Lines expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Delta Air's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Delta Air's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
Our Final Take On Delta Air
While some other entities within the airlines industry are still a little expensive, even after the recent corrections, Delta Air may offer a potential longer-term growth to stakeholders. The bottom line, as of the 12th of January 2023, our actual 90 days recommendation on the company is
Strong Buy. We believe Delta Air is
undervalued with
below average probability of distress for the next two years.
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Delta Air Lines. Please refer to our
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