Caption Management LLC Invests $1.14 Million in Southwest Airlines Co. $LUV

Key Points

• Caption Management LLC acquired 34,000 shares of Southwest Airlines Co. valued at approximately $1.14 million during the first quarter.
• Southwest Airlines' board approved a stock buyback plan allowing the company to repurchase up to $2 billion in shares, indicating a belief that the stock is currently undervalued.
• The airline recently announced a quarterly dividend of $0.18 per share, with an annual yield of 2.2%, though the dividend payout ratio is currently over 109%.

Caption Management LLC purchased a new position in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) in the first quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The firm purchased 34,000 shares of the airline's stock, valued at approximately $1,142,000.

A number of other hedge funds and other institutional investors have also bought and sold shares of LUV. Primecap Management Co. CA grew its position in shares of Southwest Airlines by 1.6% in 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 during the last quarter. Jacobs Levy Equity Management Inc. grew its position in shares of 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 purchasing an additional 2,391,495 shares during the last quarter. Charles Schwab Investment Management Inc. grew its position in shares of 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 purchasing an additional 136,410 shares during the last quarter. Sound Shore Management Inc. CT grew its position in shares of Southwest Airlines by 12.7% in the first 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. Finally, Nuveen LLC acquired a new position in shares of Southwest Airlines in the first quarter valued at approximately $50,433,000. Institutional investors own 80.82% of the company's stock.

Southwest Airlines Price Performance

Shares of LUV stock traded up $0.08 during trading on Wednesday, hitting $32.33. The company had a trading volume of 4,304,148 shares, compared to its average volume of 6,766,118. The stock's 50-day moving average price is $32.98 and its 200 day moving average price is $31.29. The company has a debt-to-equity ratio of 0.51, a quick ratio of 0.49 and a current ratio of 0.56. Southwest Airlines Co. has a one year low of $23.82 and a one year high of $37.96. The firm has a market capitalization of $16.98 billion, a P/E ratio of 48.98, a price-to-earnings-growth ratio of 0.85 and a beta of 1.19.

Southwest Airlines (NYSE:LUV - Get Free Report) last released 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 the consensus estimate of $7.30 billion. During the same quarter in the previous year, the company earned $0.58 earnings per share. The firm's revenue for the quarter was down 2.1% on a year-over-year basis. Equities analysts expect that Southwest Airlines Co. will post 1.55 EPS for the current fiscal year.

Southwest Airlines announced that its board has authorized a stock repurchase program on Wednesday, July 23rd that allows the company to buyback $2.00 billion in shares. This buyback authorization allows the airline to repurchase up to 9.4% of its stock through open market purchases. Stock buyback programs are typically a sign that the company's board of directors believes its shares are undervalued.

Southwest Airlines Announces Dividend

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

Insider Buying and Selling at Southwest Airlines

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

Wall Street Analyst Weigh In

Several equities analysts have recently commented on the company. UBS Group upped their target price on Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a research report on Monday, July 7th. Hsbc Global Res raised Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th. Evercore ISI decreased their target price on Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating on the stock in a research report on Friday, July 25th. Jefferies Financial Group raised Southwest Airlines from an "underperform" rating to a "hold" rating and upped their target price for the company from $24.00 to $33.00 in a research report on Tuesday, May 27th. Finally, Deutsche Bank Aktiengesellschaft upgraded Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price target for the company in a research note on Thursday, May 29th. Four research analysts have rated the stock with a Buy rating, nine have issued a Hold rating and six have assigned a Sell rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Reduce" and a consensus price target 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.