Gradient Investments LLC Grows Holdings in Southwest Airlines Co. $LUV

Key Points

• Gradient Investments LLC increased its holdings in Southwest Airlines by 4.5%, now owning 548,423 shares valued at approximately $17.79 million as of the latest SEC filing.
• Southwest Airlines reported a quarterly earnings miss with earnings per share of $0.43, below analyst expectations of $0.51, along with a revenue decline of 2.1% year-over-year.
• The company has authorized a $2 billion stock buyback plan, indicating that the board believes its shares are undervalued, and also announced a quarterly dividend of $0.18 per share.

Gradient Investments LLC raised its position in Southwest Airlines Co. (NYSE:LUV - Free Report) by 4.5% during the second quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The institutional investor owned 548,423 shares of the airline's stock after purchasing an additional 23,381 shares during the period. Gradient Investments LLC owned about 0.10% of Southwest Airlines worth $17,791,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds also recently added to or reduced their stakes in the company. CWC Advisors LLC. lifted its holdings in Southwest Airlines by 2.4% in the 4th quarter. CWC Advisors LLC. now owns 13,310 shares of the airline's stock valued at $447,000 after purchasing an additional 311 shares in the last quarter. Copperwynd Financial LLC lifted its holdings in Southwest Airlines by 2.1% in the 1st quarter. Copperwynd Financial LLC now owns 16,301 shares of the airline's stock valued at $547,000 after purchasing an additional 337 shares in the last quarter. PNC Financial Services Group Inc. increased its stake in shares of Southwest Airlines by 0.5% during the 1st quarter. PNC Financial Services Group Inc. now owns 76,719 shares of the airline's stock valued at $2,576,000 after acquiring an additional 345 shares during the last quarter. Horizon Investments LLC increased its stake in shares of Southwest Airlines by 4.5% during the 1st quarter. Horizon Investments LLC now owns 8,590 shares of the airline's stock valued at $288,000 after acquiring an additional 369 shares during the last quarter. Finally, MassMutual Private Wealth & Trust FSB increased its stake in shares of Southwest Airlines by 22.1% during the 1st 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 last quarter. 80.82% of the stock is currently owned by hedge funds and other institutional investors.

Southwest Airlines Stock Down 0.1%

Shares of NYSE:LUV opened at $31.69 on Monday. The company has a quick ratio of 0.49, a current ratio of 0.56 and a debt-to-equity ratio of 0.51. Southwest Airlines Co. has a 52-week low of $23.82 and a 52-week high of $37.96. The company has a 50 day moving average of $32.74 and a two-hundred day moving average of $31.36. The company has a market capitalization of $16.64 billion, a price-to-earnings ratio of 48.02, a price-to-earnings-growth ratio of 0.82 and a beta of 1.19.

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

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

Southwest Airlines Announces Dividend

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 issued a dividend of $0.18 per share. This represents a $0.72 dividend on an annualized basis and a yield of 2.3%. The ex-dividend date of this dividend is Wednesday, September 3rd. Southwest Airlines's payout ratio is presently 109.09%.

Insider Transactions at Southwest Airlines

In other news, Director Gregg A. Saretsky bought 3,345 shares of the stock in a transaction that occurred on Wednesday, August 6th. The shares were purchased 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 directly 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 Securities & Exchange Commission, which is available through the SEC website. Also, Director Sarah Feinberg bought 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 acquisition, 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 ownership of the stock. The disclosure for this purchase can be found here. 0.79% of the stock is owned by insiders.

Wall Street Analysts Forecast Growth

A number of research analysts have recently commented on the stock. Deutsche Bank Aktiengesellschaft raised 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. Evercore ISI dropped 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. Barclays upped their price objective on shares of Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a research note on Thursday, July 10th. UBS Group upped 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. Finally, JPMorgan Chase & Co. increased their target price on shares of Southwest Airlines from $28.00 to $35.00 and gave the stock an "overweight" rating in a research report on Friday. Five research analysts have rated the stock with a Buy rating, nine have assigned a Hold rating and five have assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Hold" and an average target price of $33.38.

Southwest Airlines Company 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.

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