Dimensional Fund Advisors LP Decreases Holdings in Southwest Airlines Co. $LUV

Key Points

• Dimensional Fund Advisors LP has reduced its stake in Southwest Airlines Co. by selling 57,450 shares, bringing its total ownership to approximately 6 million shares, valued at $203 million.
• Southwest Airlines reported earnings per share of $0.43 for the last quarter, missing analyst expectations of $0.51, with revenue also falling short at $7.24 billion.
• The company announced a $2 billion stock repurchase program which allows it to buy back up to 9.4% of its shares, indicating the board's belief that the stock is undervalued.

Dimensional Fund Advisors LP lowered its stake in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 0.9% in the first quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The firm owned 6,054,184 shares of the airline's stock after selling 57,450 shares during the period. Dimensional Fund Advisors LP owned 1.06% of Southwest Airlines worth $203,285,000 as of its most recent filing with the Securities & Exchange Commission.

Several other hedge funds and other institutional investors have also bought and sold shares of the stock. Pandora Wealth Inc. acquired a new position in shares of Southwest Airlines during the first quarter worth $34,000. Cheviot Value Management LLC purchased a new position in Southwest Airlines during the 1st quarter worth approximately $42,000. Quent Capital LLC lifted its position in Southwest Airlines by 78.6% during the first quarter. Quent Capital LLC now owns 1,472 shares of the airline's stock valued at $49,000 after purchasing an additional 648 shares during the period. Optiver Holding B.V. lifted its holdings in shares of Southwest Airlines by 370.3% in the 4th quarter. Optiver Holding B.V. now owns 1,919 shares of the airline's stock valued at $65,000 after buying an additional 1,511 shares during the period. Finally, MassMutual Private Wealth & Trust FSB lifted its holdings in Southwest Airlines by 22.1% in the first quarter. MassMutual Private Wealth & Trust FSB now owns 2,161 shares of the airline's stock valued at $73,000 after acquiring an additional 391 shares during the period. Institutional investors own 80.82% of the company's stock.

Insider Activity at Southwest Airlines

In related news, Director Sarah Feinberg bought 1,500 shares of the stock in a transaction on Tuesday, August 5th. The shares were bought at an average cost of $30.01 per share, for a total transaction of $45,015.00. Following the purchase, the director owned 14,229 shares of the company's stock, valued at $427,012.29. This trade represents a 11.78% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, Director Gregg A. Saretsky purchased 3,345 shares of the firm's stock in a transaction that occurred on Wednesday, August 6th. The shares were bought at an average cost of $30.03 per share, with a total value 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 trade represents a 16.48% 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.

Southwest Airlines Stock Up 5.4%

NYSE LUV traded up $1.6650 during trading on Friday, reaching $32.7350. 8,443,753 shares of the company's stock were exchanged, compared to its average volume of 11,676,020. The company has a 50 day moving average price of $32.75 and a two-hundred day moving average price of $31.14. 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 stock has a market cap of $17.19 billion, a P/E ratio of 49.60, a price-to-earnings-growth ratio of 0.81 and a beta of 1.26. Southwest Airlines Co. has a 1 year low of $23.82 and a 1 year high of $37.96.

Southwest Airlines (NYSE:LUV - Get Free Report) last issued 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 company had revenue of $7.24 billion during the quarter, compared to analyst estimates of $7.30 billion. During the same quarter in the previous year, the company posted $0.58 EPS. The company's quarterly revenue was down 2.1% on a year-over-year basis. On average, equities research analysts anticipate that Southwest Airlines Co. will post 1.55 EPS for the current fiscal year.

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

Southwest Airlines Dividend Announcement

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 issued 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 of this dividend is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio is presently 109.09%.

Wall Street Analyst Weigh In

Several equities research analysts have recently issued reports on the stock. Evercore ISI lowered their target price on shares of Southwest Airlines from $40.00 to $34.00 and set an "in-line" rating on the stock in a research note on Friday, July 25th. Deutsche Bank Aktiengesellschaft raised shares of Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 target price on the stock in a research note on Thursday, May 29th. Raymond James Financial restated an "outperform" rating and issued a $40.00 price target (down from $42.00) on shares of Southwest Airlines in a research report on Tuesday, April 29th. Wall Street Zen downgraded shares of Southwest Airlines from a "hold" rating to a "sell" rating in a research note on Saturday, July 26th. Finally, Barclays lifted their target price on Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a research report on Thursday, July 10th. Four equities research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and six have issued a Sell rating to the stock. Based on data from MarketBeat, Southwest Airlines has an average 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.