Kercheville Advisors LLC Cuts Stake in Southwest Airlines Co. $LUV

Key Points

• Kercheville Advisors LLC reduced its stake in Southwest Airlines by 23.4% in Q2, ending with 54,854 shares valued at approximately $1.78 million.
• Southwest Airlines reported Q2 earnings of $0.43 per share, missing estimates, with a revenue of $7.24 billion, which was below expectations.
• The company announced a $2.00 billion stock buyback program and declared a quarterly dividend of $0.18 per share, representing a yield of 2.2%.

Kercheville Advisors LLC lowered its position in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 23.4% in the second quarter, according to the company in its most recent 13F filing with the SEC. The fund owned 54,854 shares of the airline's stock after selling 16,766 shares during the quarter. Kercheville Advisors LLC's holdings in Southwest Airlines were worth $1,779,000 as of its most recent filing with the SEC.

A number of other large investors also recently bought and sold shares of LUV. GAMMA Investing LLC raised its position in Southwest Airlines by 3,538.6% during the 1st quarter. GAMMA Investing LLC now owns 326,129 shares of the airline's stock worth $10,951,000 after buying an additional 317,166 shares during the last quarter. Procyon Advisors LLC purchased a new position in Southwest Airlines during the 1st quarter worth $212,000. OLD National Bancorp IN raised its position in Southwest Airlines by 26.0% during the 1st quarter. OLD National Bancorp IN now owns 11,644 shares of the airline's stock worth $391,000 after buying an additional 2,406 shares during the last quarter. Portside Wealth Group LLC raised its position in Southwest Airlines by 3.2% during the 1st quarter. Portside Wealth Group LLC now owns 22,428 shares of the airline's stock worth $753,000 after buying an additional 693 shares during the last quarter. Finally, CX Institutional purchased a new position in Southwest Airlines during the 1st quarter worth $369,000. Hedge funds and other institutional investors own 80.82% of the company's stock.

Southwest Airlines Price Performance

Southwest Airlines stock opened at $32.56 on Friday. Southwest Airlines Co. has a 12-month low of $23.82 and a 12-month high of $37.96. The stock has a market capitalization of $17.10 billion, a P/E ratio of 49.34, a P/E/G ratio of 0.88 and a beta of 1.21. The firm's 50-day moving average is $31.64 and its two-hundred day moving average is $31.52. The company has a debt-to-equity ratio of 0.51, a current ratio of 0.56 and a quick ratio of 0.49.

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 (EPS) 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 firm had revenue of $7.24 billion for the quarter, compared to analyst estimates of $7.30 billion. During the same period in the prior year, the business earned $0.58 earnings per share. Southwest Airlines's revenue for the quarter was down 2.1% on a year-over-year basis. Equities analysts predict that Southwest Airlines Co. will post 1.55 earnings per share for the current year.

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

Southwest Airlines Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Wednesday, September 24th. Shareholders of record on Wednesday, September 3rd were paid a dividend of $0.18 per share. This represents a $0.72 annualized dividend and a dividend yield of 2.2%. The ex-dividend date of this dividend was Wednesday, September 3rd. Southwest Airlines's dividend payout ratio (DPR) is currently 109.09%.

Insider Activity

In other news, Director Gregg A. Saretsky purchased 3,345 shares of the firm's stock in a transaction 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 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 transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Sarah Feinberg purchased 1,500 shares of the firm's stock in a transaction 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 purchase, the director directly owned 14,229 shares in the company, valued at $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 company insiders.

Analysts Set New Price Targets

LUV has been the subject of a number of research analyst reports. Wall Street Zen downgraded shares of Southwest Airlines from a "hold" rating to a "sell" rating in a report on Saturday, July 26th. Barclays increased their price target on shares of Southwest Airlines from $26.00 to $34.00 and gave the company an "equal weight" rating in a report on Thursday, July 10th. HSBC downgraded shares of Southwest Airlines from a "hold" rating to a "reduce" rating in a report on Thursday, July 24th. UBS Group increased their price target on shares of Southwest Airlines from $27.00 to $34.00 and gave the company a "neutral" rating in a report on Monday, July 7th. Finally, Susquehanna increased their price target on shares of Southwest Airlines from $30.00 to $35.00 and gave the company a "neutral" rating in a report on Friday. Five analysts have rated the stock with a Buy rating, ten have assigned a Hold rating and four have assigned a Sell rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Hold" and an average target price of $33.38.

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.

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