AlphaQuest LLC Makes New Investment in Southwest Airlines Co. $LUV

Key Points

• AlphaQuest LLC acquired 10,555 shares of Southwest Airlines for approximately $354,000 during Q1, indicating increased institutional interest in the airline's stock.
• Insiders have been active, with Director Sarah Feinberg purchasing 1,500 shares and Director Gregg A. Saretsky acquiring 3,345 shares, both increasing their stakes in the company significantly.
• Analysts have adjusted their price targets, with most maintaining a "neutral" or "hold" rating, while the consensus price target for Southwest Airlines currently stands at $33.06.

AlphaQuest LLC purchased a new position in Southwest Airlines Co. (NYSE:LUV - Free Report) during the first quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The firm purchased 10,555 shares of the airline's stock, valued at approximately $354,000.

A number of other hedge funds also recently bought and sold shares of LUV. Primecap Management Co. CA raised its stake in Southwest Airlines by 1.6% during the first quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock valued at $1,668,533,000 after purchasing an additional 788,255 shares in the last quarter. Jacobs Levy Equity Management Inc. increased its stake in Southwest Airlines by 66.0% during the fourth quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock worth $202,219,000 after acquiring an additional 2,391,495 shares during the last quarter. Northern Trust Corp increased its stake in Southwest Airlines by 8.9% during the fourth quarter. Northern Trust Corp now owns 4,897,564 shares of the airline's stock worth $164,656,000 after acquiring an additional 400,886 shares during the last quarter. Charles Schwab Investment Management Inc. raised its position in Southwest Airlines by 3.9% during the first quarter. Charles Schwab Investment Management Inc. now owns 3,602,939 shares of the airline's stock valued at $120,987,000 after purchasing an additional 136,410 shares during the period. Finally, Sound Shore Management Inc. CT lifted its stake in shares of Southwest Airlines by 12.7% in the 1st quarter. Sound Shore Management Inc. CT now owns 2,857,308 shares of the airline's stock valued at $95,948,000 after purchasing an additional 321,258 shares during the last quarter. Hedge funds and other institutional investors own 80.82% of the company's stock.

Southwest Airlines Stock Performance

LUV traded down $0.04 on Monday, reaching $32.94. The stock had a trading volume of 3,629,871 shares, compared to its average volume of 7,117,135. The company has a current ratio of 0.56, a quick ratio of 0.49 and a debt-to-equity ratio of 0.51. Southwest Airlines Co. has a 12-month low of $23.82 and a 12-month high of $37.96. The business's 50-day moving average price is $32.93 and its two-hundred day moving average price is $31.25. The company has a market cap of $17.30 billion, a P/E ratio of 49.91, a price-to-earnings-growth ratio of 0.85 and a beta of 1.19.

Southwest Airlines (NYSE:LUV - Get Free Report) last announced its earnings results on Wednesday, July 23rd. The airline reported $0.43 earnings per share for the quarter, missing the consensus estimate of $0.51 by ($0.08). Southwest Airlines had a return on equity of 6.27% and a net margin of 1.43%.The business had revenue of $7.24 billion for the quarter, compared to analyst estimates of $7.30 billion. During the same period in the previous year, the company earned $0.58 earnings per share. The company's quarterly revenue was down 2.1% compared to the same quarter last year. Sell-side analysts forecast that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

Southwest Airlines Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, September 24th. Stockholders of record on Wednesday, September 3rd will be given a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.2%. The ex-dividend date is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio is 109.09%.

Southwest Airlines announced that its Board of Directors has initiated a share repurchase program on Wednesday, July 23rd that authorizes the company to repurchase $2.00 billion in shares. This repurchase authorization authorizes the airline to repurchase up to 9.4% of its shares through open market purchases. Shares repurchase programs are generally a sign that the company's leadership believes its shares are undervalued.

Analyst Upgrades and Downgrades

Several research analysts have commented on the stock. Jefferies Financial Group raised shares of Southwest Airlines from an "underperform" rating to a "hold" rating and lifted their price objective for the stock from $24.00 to $33.00 in a research note on Tuesday, May 27th. Wall Street Zen lowered shares of Southwest Airlines from a "hold" rating to a "sell" rating in a report on Saturday, July 26th. Susquehanna upped their target price on Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research note on Tuesday, August 5th. Barclays raised their price target on shares of Southwest Airlines from $26.00 to $34.00 and gave the stock an "equal weight" rating in a research note on Thursday, July 10th. Finally, HSBC cut Southwest Airlines from a "hold" rating to a "reduce" rating in a report on Thursday, July 24th. Four investment analysts have rated the stock with a Buy rating, nine have given a Hold rating and six have issued a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Reduce" and an average target price of $33.06.

Insider Activity

In other Southwest Airlines news, Director Sarah Feinberg purchased 1,500 shares of the stock in a transaction that occurred on Tuesday, August 5th. The shares were purchased at an average cost of $30.01 per share, for a total transaction of $45,015.00. Following the completion of the transaction, the director owned 14,229 shares of the company's stock, valued at $427,012.29. The trade was a 11.78% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available through the SEC website. Also, Director Gregg A. Saretsky bought 3,345 shares of the stock in a transaction dated Wednesday, August 6th. The shares were bought at an average price of $30.03 per share, for a total transaction of $100,450.35. Following the completion of the acquisition, the director owned 23,644 shares in the company, valued at approximately $710,029.32. The trade was a 16.48% increase in their ownership of the stock. The disclosure for this purchase can be found here. Company insiders own 0.79% of the company's stock.

Southwest Airlines Profile

Southwest Airlines Co operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos.