Kettle Hill Capital Management LLC Lowers Holdings in Southwest Airlines Co. $LUV

Key Points

• Kettle Hill Capital Management LLC reduced its stake in Southwest Airlines Co. by 22.3%, selling 105,496 shares, and now holds 367,556 shares worth approximately $12.34 million.
• Southwest Airlines recently reported earnings of $0.43 EPS for the quarter, missing expectations by $0.08, and disclosed a quarterly dividend of $0.18 per share.
• The company approved a $2 billion share buyback plan, allowing it to repurchase up to 9.4% of its shares, indicating management's belief that the stock is undervalued.

Kettle Hill Capital Management LLC cut its stake in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) by 22.3% in the 1st quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 367,556 shares of the airline's stock after selling 105,496 shares during the quarter. Southwest Airlines accounts for about 3.4% of Kettle Hill Capital Management LLC's investment portfolio, making the stock its 12th largest holding. Kettle Hill Capital Management LLC owned approximately 0.06% of Southwest Airlines worth $12,343,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

Several other institutional investors also recently bought and sold shares of the stock. Primecap Management Co. CA boosted its holdings in Southwest Airlines by 1.6% during the 1st quarter. Primecap Management Co. CA now owns 49,688,308 shares of the airline's stock valued at $1,668,533,000 after acquiring an additional 788,255 shares during the period. Jacobs Levy Equity Management Inc. raised its position in Southwest Airlines by 66.0% during the 4th 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. raised its position in Southwest Airlines by 3.9% during the 1st 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 raised its position in Southwest Airlines by 12.7% during the 1st 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, Alyeska Investment Group L.P. bought a new position in Southwest Airlines during the 1st quarter valued at approximately $56,244,000. 80.82% of the stock is currently owned by hedge funds and other institutional investors.

Insiders Place Their Bets

In related news, Director Sarah Feinberg bought 1,500 shares of the firm's stock in a transaction that occurred on Tuesday, August 5th. The shares were bought at an average cost of $30.01 per share, with a total value of $45,015.00. Following the acquisition, the director owned 14,229 shares in the company, valued at $427,012.29. This trade represents a 11.78% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Gregg A. Saretsky acquired 3,345 shares of the stock in a transaction dated Wednesday, August 6th. The stock was acquired at an average price of $30.03 per share, for a total transaction of $100,450.35. Following the completion of the transaction, the director directly owned 23,644 shares of the company's stock, valued at approximately $710,029.32. This 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 currently owned by company insiders.

Analyst Upgrades and Downgrades

A number of research analysts have commented on LUV shares. Hsbc Global Res raised Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th. Barclays upped their price target 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. Deutsche Bank Aktiengesellschaft raised Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 price target for the company in a research report on Thursday, May 29th. UBS Group increased their target price on Southwest Airlines from $27.00 to $34.00 and gave the stock a "neutral" rating in a research report on Monday, July 7th. Finally, HSBC lowered Southwest Airlines from a "hold" rating to a "reduce" rating in a research report on Thursday, July 24th. Four equities research analysts have rated the stock with a Buy rating, nine have given a Hold rating and six have issued a Sell rating to the company. According to data from MarketBeat.com, the company has a consensus rating of "Reduce" and an average target price of $33.06.

Southwest Airlines Stock Up 0.8%

LUV traded up $0.24 during trading on Friday, hitting $31.36. 8,026,881 shares of the company's stock traded hands, compared to its average volume of 6,692,803. The stock has a market capitalization of $16.47 billion, a price-to-earnings ratio of 47.52, a PEG ratio of 0.81 and a beta of 1.19. Southwest Airlines Co. has a 12-month low of $23.82 and a 12-month high of $37.96. The company has a current ratio of 0.56, a quick ratio of 0.49 and a debt-to-equity ratio of 0.51. The company's 50 day simple moving average is $32.96 and its two-hundred day simple moving average is $31.32.

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 analysts' consensus estimates of $0.51 by ($0.08). The firm had revenue of $7.24 billion during the quarter, compared to analysts' expectations of $7.30 billion. Southwest Airlines had a return on equity of 6.27% and a net margin of 1.43%.The business's quarterly revenue was down 2.1% on a year-over-year basis. During the same quarter last year, the business earned $0.58 earnings per share. Analysts predict that Southwest Airlines Co. will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines declared that its Board of Directors has approved a stock buyback plan on Wednesday, July 23rd that allows the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization allows the airline to purchase up to 9.4% of its stock through open market purchases. Stock repurchase plans are usually a sign that the company's leadership believes its shares are undervalued.

Southwest Airlines Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Wednesday, September 24th. Stockholders of record on Wednesday, September 3rd will be paid a $0.18 dividend. This represents a $0.72 dividend on an annualized basis and a dividend yield of 2.3%. The ex-dividend date is Wednesday, September 3rd. Southwest Airlines's dividend payout ratio (DPR) is 109.09%.

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.