Why I like Delta Airlines (the stock)

Delta Airlines is in bankruptcy. In 2000 the stock was about $40 per share. Today the stock is $.84 a share. (I bought it at $.65 a share.)

They expect to emerge from bankruptcy in the middle of 2007, and I believe they will for a number of reasons.

First, Management is good. The CEO of Delta is only making about $250K a year, and he's not going out and selling a bunch of stock options--translation: he's not "cashing in" while the rest of the Delta employees are taking pay cuts and suffering--that would be bad for company morale if he was.

Second, Delta cancelled it's old fashioned pension plan. It was too expensive.

Third, Gas prices are coming back down.

Fourth, I've spoken with many Delta employees. They are confident and they have high morale.

Fifth, they are selling off their regional carrier "Delta Express," which is losing money because it was competing with other low cost carriers like Southwest, Jet Blue, and Airtran and not doing so hot.

Sixth, they are cutting costs in the computer infra-structure. They just signed a deal Perot's company, which is going to save them tons of money. I actually got this news about a month before it was released. (a girl was blabbing about it at a bar)

Seventh, they are adding flights and recalling pilots and flight attendents--a good sign things are picking up.

Lastly, Delta is a great well-established company with a great PR department. They are constantly feeding great news about the company out to investors--this is probably the most important thing of all. People need to feel like they are making a good decision when they invest--good news instills confidence.

So, there you have it. My stock pick of the week. If I had the money I would buy 100,000 shares, and I would probably be a millionnaire by the middle of next year, but I would settle for $100,000.