Alyeska Investment Group L.P. Invests $56.24 Million in Southwest Airlines Co. $LUV

Key Points

• Alyeska Investment Group L.P. acquired 1,674,920 shares of Southwest Airlines, valued at approximately $56.2 million, increasing their ownership to 0.29% of the company.
• Several hedge funds have also increased or initiated their positions, with 80.82% of the company's stock now owned by institutional investors.
• Southwest Airlines announced a quarterly dividend of $0.18 per share and a stock buyback program allowing for $2 billion in repurchases, indicating the board's belief that the stock is undervalued.

Alyeska Investment Group L.P. bought a new position in Southwest Airlines Co. (NYSE:LUV - Free Report) in the first quarter, according to its most recent filing with the SEC. The firm bought 1,674,920 shares of the airline's stock, valued at approximately $56,244,000. Alyeska Investment Group L.P. owned approximately 0.29% of Southwest Airlines as of its most recent SEC filing.

A number of other institutional investors also recently bought and sold shares of the stock. Primecap Management Co. CA boosted its stake in Southwest Airlines by 1.6% in the 1st quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock worth $1,668,533,000 after purchasing an additional 788,255 shares in the last quarter. Jacobs Levy Equity Management Inc. boosted its stake in Southwest Airlines by 66.0% in the 4th quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock worth $202,219,000 after purchasing an additional 2,391,495 shares in the last quarter. Charles Schwab Investment Management Inc. boosted its stake in Southwest Airlines by 3.9% in the 1st quarter. Charles Schwab Investment Management Inc. now owns 3,602,939 shares of the airline's stock worth $120,987,000 after purchasing an additional 136,410 shares in the last quarter. Sound Shore Management Inc. CT lifted its stake in Southwest Airlines by 12.7% during 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 acquiring an additional 321,258 shares during the period. Finally, Nuveen LLC acquired a new stake in Southwest Airlines during the 1st quarter valued at approximately $50,433,000. 80.82% of the stock is currently owned by institutional investors and hedge funds.

Southwest Airlines Stock Performance

Shares of LUV traded up $0.24 during trading hours on Friday, hitting $31.36. The stock had a trading volume of 8,026,881 shares, compared to its average volume of 6,645,707. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56. The firm has a 50-day moving average price of $32.96 and a 200 day moving average price of $31.30. Southwest Airlines Co. has a fifty-two week low of $23.82 and a fifty-two week high of $37.96. The firm has a market capitalization of $16.47 billion, a price-to-earnings ratio of 47.52, a PEG ratio of 0.81 and a beta of 1.19.

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

Southwest Airlines Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Wednesday, September 24th. Investors of record on Wednesday, September 3rd will be paid a $0.18 dividend. This represents a $0.72 annualized dividend and a dividend yield of 2.3%. The ex-dividend date is Wednesday, September 3rd. Southwest Airlines's payout ratio is currently 109.09%.

Southwest Airlines declared that its board has initiated a stock buyback plan on Wednesday, July 23rd that authorizes the company to buyback $2.00 billion in outstanding shares. This buyback authorization authorizes the airline to purchase up to 9.4% of its shares through open market purchases. Shares buyback plans are usually an indication that the company's leadership believes its stock is undervalued.

Wall Street Analyst Weigh In

Several analysts have commented on LUV shares. Hsbc Global Res upgraded shares of Southwest Airlines to a "moderate sell" rating in a research note on Thursday, July 24th. Deutsche Bank Aktiengesellschaft upgraded shares of Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price objective for the company in a research note on Thursday, May 29th. Susquehanna lifted their price objective on shares of Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research note on Tuesday, August 5th. Evercore ISI decreased their price objective on shares of Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating for the company in a research note on Friday, July 25th. Finally, UBS Group lifted their price objective on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research note on Monday, July 7th. Four analysts have rated the stock with a Buy rating, nine have issued a Hold rating and six have issued a Sell rating to the stock. According to MarketBeat, Southwest Airlines currently has an average rating of "Reduce" and an average target price of $33.06.

Insider Buying and Selling at Southwest Airlines

In other news, Director Sarah Feinberg bought 1,500 shares of the firm's stock in a transaction that occurred on Tuesday, August 5th. The stock was purchased at an average cost of $30.01 per share, for a total transaction of $45,015.00. Following the purchase, the director directly owned 14,229 shares in the company, valued at approximately $427,012.29. This trade represents a 11.78% increase in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Gregg A. Saretsky acquired 3,345 shares of the firm's stock in a transaction on Wednesday, August 6th. The shares were bought at an average cost 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 of the company's stock, valued at approximately $710,029.32. This represents a 16.48% increase in their ownership of the stock. The disclosure for this purchase can be found here. Insiders own 0.79% of the company's stock.

About Southwest Airlines

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.