Delta Air Lines (NYSE: DAL)

Tepper purchased 6,740,189 shares of Delta last quarter. I believe Delta is a good buy at current levels. It's trading at ~5.15x 2012 EPS and ~4x FCF. It appears that investors believe that 2012 will be the peak year for airline profitability. However, I don’t agree with them and believe that economic recovery will continue to drive stock price higher. The airline industry is in a good shape given tight supply, a moderating jet fuel futures curve, and still firm booking trends. Delta is trading at a discount to its peers, which is not justified given DAL has much less labor (non-union) and merger risk than peers (UAL/CAL, LCC/AMR). Although Tepper also purchased shares of United Continental and US Airways last quarter, I would recommend sticking to Delta Airlines.

3 Long Ideas from David Tepper's Top Buys - DAL, MRVL, ORCL - Foolish Blogging Network