Brandywine Global Investment Management LLC Invests $12.02 Million in Southwest Airlines Co. $LUV

Key Points

• Brandywine Global Investment Management LLC acquired 357,812 shares of Southwest Airlines, valued at approximately $12 million, marking a significant investment in the airline.
• Corporate insiders, including Directors Sarah Feinberg and Gregg A. Saretsky, recently increased their stakes in Southwest Airlines, signaling confidence in the company's prospects.
• Southwest Airlines announced a $2 billion stock repurchase program and a quarterly dividend of $0.18 per share, reflecting the board's belief that the company's shares are undervalued.

Brandywine Global Investment Management LLC acquired a new stake in Southwest Airlines Co. (NYSE:LUV - Free Report) during the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 357,812 shares of the airline's stock, valued at approximately $12,015,000. Brandywine Global Investment Management LLC owned about 0.06% of Southwest Airlines as of its most recent filing with the Securities and Exchange Commission (SEC).

Other large investors have also recently added to or reduced their stakes in the company. Primecap Management Co. CA lifted 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 worth $1,668,533,000 after purchasing an additional 788,255 shares in the last quarter. Dimensional Fund Advisors LP increased its holdings in Southwest Airlines by 6.5% in the fourth quarter. Dimensional Fund Advisors LP now owns 6,111,634 shares of the airline's stock valued at $205,476,000 after buying an additional 372,313 shares during the last quarter. Jacobs Levy Equity Management Inc. increased its holdings in Southwest Airlines by 66.0% in the fourth quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock valued at $202,219,000 after buying an additional 2,391,495 shares during the last quarter. Northern Trust Corp increased its holdings in Southwest Airlines by 8.9% in the fourth quarter. Northern Trust Corp now owns 4,897,564 shares of the airline's stock valued at $164,656,000 after buying an additional 400,886 shares during the last quarter. Finally, Charles Schwab Investment Management Inc. increased its holdings in Southwest Airlines by 3.9% in 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 buying an additional 136,410 shares during the last quarter. 80.82% of the stock is currently owned by institutional investors and hedge funds.

Southwest Airlines Stock Performance

LUV traded up $0.2850 during trading on Tuesday, reaching $31.5950. The company's stock had a trading volume of 5,216,355 shares, compared to its average volume of 12,003,156. The company's fifty day moving average price is $32.83 and its 200-day moving average price is $31.13. Southwest Airlines Co. has a 52-week low of $23.82 and a 52-week high of $37.96. 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 company has a market capitalization of $16.59 billion, a price-to-earnings ratio of 47.87, a price-to-earnings-growth ratio of 0.81 and a beta of 1.26.

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

Southwest Airlines declared that its Board of Directors has authorized a share buyback program on Wednesday, July 23rd that allows the company to buyback $2.00 billion in shares. This buyback authorization allows the airline to purchase up to 9.4% of its shares through open market purchases. Shares buyback programs are often an indication that the company's board of directors believes its stock is undervalued.

Southwest Airlines Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, September 24th. Stockholders of record on Wednesday, September 3rd will be given a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.3%. The ex-dividend date is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio (DPR) is presently 109.09%.

Insider Buying and Selling

In related news, Director Gregg A. Saretsky purchased 3,345 shares of Southwest Airlines stock in a transaction dated Wednesday, August 6th. The stock was bought at an average cost of $30.03 per share, for a total transaction of $100,450.35. Following the transaction, 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 transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, Director Sarah Feinberg purchased 1,500 shares of Southwest Airlines stock in a transaction dated Tuesday, August 5th. The shares were bought at an average price of $30.01 per share, with a total value of $45,015.00. Following the completion of the transaction, the director owned 14,229 shares in the company, valued at approximately $427,012.29. This trade represents a 11.78% increase in their position. The disclosure for this purchase can be found here. 0.79% of the stock is currently owned by company insiders.

Wall Street Analysts Forecast Growth

Several brokerages have issued reports on LUV. Wall Street Zen lowered Southwest Airlines from a "hold" rating to a "sell" rating in a report on Saturday, July 26th. Raymond James Financial reiterated an "outperform" rating and set a $40.00 target price (down previously from $42.00) on shares of Southwest Airlines in a research note on Tuesday, April 29th. Evercore ISI decreased their target price 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. Barclays increased their target price 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, UBS Group increased their target price on shares of Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a research note on Monday, July 7th. Four analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and six have given a Sell rating to the stock. According to MarketBeat.com, the stock has an average rating of "Reduce" and a consensus target price of $33.06.

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.