$DAL

Summary

The analyst has taken a long position in Delta Air Lines (DAL) as a hedge following the Iran/US deal, viewing it as a turnaround play with margin expansion potential due to delivery delays capping capacity and falling fuel costs.

Reasoning

Boeing and Airbus delivery delays cap industry capacity, protecting airfares which remain ~25% higher yoy despite softening consumer sentiment; investment-grade balance sheets and collapsing fuel costs should drive margin expansion; Delta is a quality leaner but more priced in, United offers better risk/reward, Alaska highest risk/reward; oil price remains a key risk; DAL earnings in July could trigger re-rate if guidance is good.

Three random themes & analysis: 1. Offshore drilling 2. Salmon 3. Airlines These aren't multi-year stories like AI, humanoids or space. But are instead catalyst driven, short term trades. High level notes: 1. Offshore drilling Offshore drilling equities trade like distressed cyclicals even as they strengthen contracts. $RIG for example trades at P/B of ~0.93 & P/S ~1.8x. So sentiment is extremely bearish even while they've been adding backlog. Generalists have abandoned oilfield services since the industry is relatively small + scarred by the 2020-21 bankruptcy wave. In terms of potential catalysts: - Transocean-Valaris merger (Feb 2026) needs shareholder/regulatory approval which would be a potential re-rating event. - Management guides utilisation above 90% by late 2026, approaching 100% in 2027. - $RIG added ~$1.6B backlog since April + recent fixtures span ~$550k/day. Oil is obviously the key risk factor though where an oil price collapse (e.g. WTI below ~$60) triggers capex cuts + contract deferrals. That margin compression would offset any backlog gains made. No positions here yet for me, but I do have positions further down in the Airlines section. $RIG does look kinda compelling at these levels tho w/ their backlog growth. But do I wanna hedge the AI trade more? Not sure just yet... 2. Salmon This one's fun. 2025 was a record supply year for salmon w/ industry supply up 18%. Which ultimately crushed spot prices. Aggressive harvesting in Q2/Q3 2025 depleted biomass, setting up a sharp H1 2026 slowdown. Looks like a pretty nice setup though: - niche Oslo listed cluster of companies - undercovered by US investors - punished through 2025 on oversupply - strong NOK - Norway's resource-rent tax Catalysts: - Norway's salmon production fell 3% in Q1 and will fall another 2% in Q2 - which leaves global supply growth of just 0-2% in H1 2026 Prices already seem to be turning too where the benchmark salmon price was ~74 NOK/kg on June 19. Which is up ~13% over the prior month. But ofc if biology recovers fast, then that'll be the key risk. Names if you're curious: Mowi, SalMar, Bakkafrost I probably won't take positions here, but it's been a fun area to research recently as a break from AI/semis lol. 3. Airlines Boeing + Airbus delivery delays are artificially capping industry capacity which protects airfares even as consumer sentiment softens. So the airlines have a cap on capacity growth which has handed them decent pricing power e.g. fares are running ~25% higher yoy + staying sticky even as fuel falls. So investment-grade balance sheets + collapsing fuel costs into H2 should drive margin expansion. $DAL, $UAL, and $ALK are the core names where you'd wanna opt on the loyalty/premium oligopoly rather than seat sales. Even w/ Spirit gone, that's why you'd want to avoid ULCCs. If I was to summarise each name: - Delta is the quality leaner but looks a lot more priced in at these levels. - United is probably better risk/reward than Delta rn. - Alaska is highest risk but highest reward. Southwest ( $LUV ) is another name but not looked too much into them in the theme. Ultimately all are turnaround plays but similar to offshore drilling, oil's the key risk which obvs acts as headwinds to margins. V. macro driven w/ Hormuz etc opening. And if Spirit routes get backfilled from July (?) then fare premiums could erode quickly. But $DAL earnings are July 9 and $UAL mid-July so could see a re-rate if sticky fares + falling fuel costs = good guidance. Just as a disclosure, I did take positions in $DAL as a hedge when Iran/US deal was signed - think I commented it a few times on my posts. --- Just for a list of fun themes I'm looking at outside of AI rn. Missing a lot of notes here tbh and it's just a spew of thoughts/info, but just don't wanna bore you guys with all the nuts and bolts lol. NFA ofc, these are just short-term investment areas if you're wondering about ideas.

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