Heartland Advisors Inc. Purchases New Stake in Southwest Airlines Co. (NYSE:LUV)

Key Points

• Heartland Advisors Inc. acquired 128,859 shares of Southwest Airlines Co. in Q1, investing approximately $4.3 million in the airline.
• Several institutional investors, including GAMMA Investing LLC, significantly increased their holdings in Southwest Airlines during the same quarter.
• Southwest Airlines announced a $2 billion share repurchase plan and declared a quarterly dividend of $0.18, reflecting a 2.17% yield.

Heartland Advisors Inc. bought a new stake in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) in the first quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund bought 128,859 shares of the airline's stock, valued at approximately $4,327,000.

Several other large investors have also recently made changes to their positions in LUV. Franklin Resources Inc. boosted its stake in shares of Southwest Airlines by 9.6% in the fourth quarter. Franklin Resources Inc. now owns 32,978,869 shares of the airline's stock worth $1,108,750,000 after buying an additional 2,896,150 shares during the last quarter. National Bank of Canada FI raised its stake in shares of Southwest Airlines by 1,327.7% in the fourth quarter. National Bank of Canada FI now owns 2,840,529 shares of the airline's stock valued at $95,499,000 after acquiring an additional 2,641,564 shares in the last quarter. Jacobs Levy Equity Management Inc. grew its holdings in shares of Southwest Airlines by 66.0% during the fourth quarter. Jacobs Levy Equity Management Inc. now owns 6,014,828 shares of the airline's stock worth $202,219,000 after buying an additional 2,391,495 shares during the last quarter. Norges Bank purchased a new stake in shares of Southwest Airlines during the 4th quarter worth approximately $57,724,000. Finally, Raymond James Financial Inc. purchased a new stake in Southwest Airlines in the 4th quarter valued at approximately $40,541,000. 80.82% of the stock is owned by institutional investors.

Insider Buying and Selling

In other news, Director Gregg A. Saretsky bought 3,670 shares of the company's stock in a transaction that occurred on Wednesday, April 30th. The shares were purchased at an average price of $27.29 per share, for a total transaction of $100,154.30. Following the completion of the transaction, the director directly owned 14,881 shares in the company, valued at approximately $406,102.49. This represents a 32.74% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is accessible through the SEC website. 0.79% of the stock is currently owned by corporate insiders.

Analyst Upgrades and Downgrades

Several analysts recently issued reports on LUV shares. Wall Street Zen downgraded Southwest Airlines from a "hold" rating to a "sell" rating in a report on Saturday. Raymond James Financial reiterated an "outperform" rating and set a $40.00 price objective (down previously from $42.00) on shares of Southwest Airlines in a research note on Tuesday, April 29th. HSBC cut shares of Southwest Airlines from a "hold" rating to a "reduce" rating in a report on Thursday, July 24th. Jefferies Financial Group raised shares of Southwest Airlines from an "underperform" rating to a "hold" rating and lifted their target price for the company from $24.00 to $33.00 in a research note on Tuesday, May 27th. Finally, UBS Group lifted their target price on shares of Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a report on Monday, July 7th. Seven research analysts have rated the stock with a sell rating, nine have issued a hold rating and four have given a buy rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $32.75.

Southwest Airlines Stock Performance

Shares of NYSE:LUV traded down $1.29 during trading on Tuesday, hitting $31.23. The company's stock had a trading volume of 13,124,880 shares, compared to its average volume of 12,066,803. The company has a 50-day moving average of $33.52 and a 200-day moving average of $31.32. Southwest Airlines Co. has a 12 month low of $23.58 and a 12 month high of $37.96. The company has a debt-to-equity ratio of 0.51, a current ratio of 0.56 and a quick ratio of 0.49. The firm has a market cap of $17.79 billion, a price-to-earnings ratio of 47.31, a P/E/G ratio of 5.12 and a beta of 1.21.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its 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). The business had revenue of $7.24 billion during the quarter, compared to analysts' expectations of $7.30 billion. Southwest Airlines had a net margin of 1.43% and a return on equity of 6.27%. The company's revenue for the quarter was down 2.1% compared to the same quarter last year. During the same period last year, the business posted $0.58 earnings per share. On average, sell-side analysts expect that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

Southwest Airlines declared that its board has authorized a share repurchase 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 stock through open market purchases. Stock buyback programs are often an indication that the company's management believes its stock is undervalued.

Southwest Airlines Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Wednesday, July 9th. Stockholders of record on Wednesday, June 18th were paid a dividend of $0.18 per share. The ex-dividend date was Wednesday, June 18th. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.31%. Southwest Airlines's payout ratio is 109.09%.

Southwest Airlines 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.