Stanley Druckenmiller built his reputation as one of the greatest money managers alive by making a small number of very large bets and holding them with conviction.
Now his family office has added a new name to that short list: Delta Air Lines.
Duquesne Family Office LLC, the investment vehicle Druckenmiller runs after closing his hedge fund Duquesne Capital to outside investors, disclosed a fresh stake in Delta Air Lines (DAL) in its second-quarter 13F filing, compiled by TIKR.
The purchase puts Druckenmiller in the same camp as Warren Buffett, whose Berkshire Hathaway also holds the airline stock.
Who is Stanley Druckenmiller?
Druckenmiller spent years running money alongside George Soros, most famously helping break the Bank of England in 1992.
He later ran his own fund, Duquesne Capital, which reportedly never had a losing year, before he returned outside capital to investors and converted the firm into a family office.
His investing style centers on concentration rather than diversification.
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“The mistake I’d say 98 percent of money managers and individuals make is they feel like they’ve got to be playing with a bunch of stuff,” Druckenmiller once told members of the Lost Tree Club in Palm Beach, Fla. “If you really see it, put all your eggs in one basket and watch the basket very carefully.”
That approach shows up in the numbers. Duquesne’s largest additional purchase in the filing was Amazon, worth about $129.1 million and nearly 3% of the portfolio. Delta was smaller by comparison, but it was still a full new addition rather than a small test bet.
Duquesne buys DAL stock
According to the 13F data, Duquesne bought 603,000 shares of Delta in the second quarter, a brand-new position worth roughly $56.5 million. It works out to about 1.28% of the firm’s total portfolio.
A few other positions from the same filing round out the picture of where Druckenmiller sees value right now:
- Amazon: 541,600 shares worth $129.1 million, about 3% of the portfolio
- United Airlines: 794,795 shares worth $108.1 million
- Seagate Technology: 122,000 shares worth $117.7 million
- Alphabet: 336,300 shares worth $120.2 million
Notably, United Airlines was an even bigger position, suggesting the family office is warming up to the airline sector broadly, rather than picking a single favorite.
DAL stock also sits in Buffett’s portfolio
Delta is not new to Warren Buffett. CNBC tracks Berkshire Hathaway’s holdings and shows Delta Air Lines as a long-running position.
Berkshire owns 57.32 million shares of Delta worth about $4.5 billion, making up around 1.3% of Berkshire’s overall stock portfolio.
More Airlines:
- Another airline cancels flights until August, offers some refunds
- Another airline will be dissolved, all flights canceled
- Airline shuts down, all flights grounded after accident
It is a much larger dollar figure than Duquesne’s new stake, which makes sense, given the difference in size between the two firms.
But the fact that two of the country’s most closely watched investors both own the stock gives it a certain stamp of approval among value-focused money managers.
Is Delta Air Lines a good buy?
Delta’s most recent quarterly results give some clues as to why investors, including Druckenmiller and Buffett, are comfortable owning the stock.
The airline reported second-quarter revenue of $17.7 billion, up 14% from the prior year, with pretax profit of $1.4 billion and earnings of $1.56 per share.
The performance beat the guidance Delta gave at the start of the quarter, even with fuel costs at record highs.
CEO Ed Bastian pointed to brand loyalty as a core reason for that resilience. During the earnings call, he explained how customer behavior has changed over his nearly three decades at the company.
“I tell groups all the time, I started here almost 30 years ago. You were asking, you were there, if you ask someone why they picked a specific airline, at least 80% of the time it’s whoever had the lowest price,” Bastian said.
“Today, if you ask a consumer why did they choose Delta, they’ll tell you, it’s because it’s Delta.”
Delta is guiding for full-year earnings of $6.50 to $7.50 per share, representing 20% growth from last year, along with free cash flow of $3 billion to $4 billion.
The company also pointed to strength in its American Express partnership, its premium cabin upgrades and its growing repair business for other airlines as reasons for confidence heading into the back half of the year.
For investors watching what smart money is doing, seeing both Druckenmiller and Buffett own Delta at the same time is a signal worth paying attention to, even if their reasons and position sizes differ.
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