Maverick Capital Ltd. Takes Position in Southwest Airlines Co. $LUV

Key Points

• Maverick Capital Ltd. invested approximately $2.85 million in Southwest Airlines, acquiring 84,787 shares in the first quarter.
• Southwest Airlines reported a quarterly EPS of $0.43, missing analyst expectations of $0.51, along with a revenue of $7.24 billion, which was slightly below estimates.
• The airline has initiated a $2 billion stock repurchase program, indicating confidence in its stock value, while also declaring a quarterly dividend of $0.18 per share.

Maverick Capital Ltd. purchased a new position in shares of Southwest Airlines Co. (NYSE:LUV - Free Report) during the first quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The institutional investor purchased 84,787 shares of the airline's stock, valued at approximately $2,847,000.

Other hedge funds and other institutional investors have also added to or reduced their stakes in the company. GAMMA Investing LLC lifted its holdings in Southwest Airlines by 3,538.6% during the first quarter. GAMMA Investing LLC now owns 326,129 shares of the airline's stock valued at $10,951,000 after purchasing an additional 317,166 shares in the last quarter. Mirae Asset Global Investments Co. Ltd. lifted its holdings in Southwest Airlines by 10.4% during the first quarter. Mirae Asset Global Investments Co. Ltd. now owns 63,625 shares of the airline's stock valued at $2,137,000 after purchasing an additional 5,981 shares in the last quarter. Exchange Traded Concepts LLC lifted its holdings in Southwest Airlines by 7.0% during the first quarter. Exchange Traded Concepts LLC now owns 11,625 shares of the airline's stock valued at $390,000 after purchasing an additional 759 shares in the last quarter. Tidal Investments LLC lifted its holdings in Southwest Airlines by 25.1% during the fourth quarter. Tidal Investments LLC now owns 55,691 shares of the airline's stock valued at $1,872,000 after purchasing an additional 11,173 shares in the last quarter. Finally, State of Alaska Department of Revenue lifted its holdings in Southwest Airlines by 1.5% during the first quarter. State of Alaska Department of Revenue now owns 69,413 shares of the airline's stock valued at $2,330,000 after purchasing an additional 1,035 shares in the last quarter. 80.82% of the stock is owned by hedge funds and other institutional investors.

Southwest Airlines Trading Down 3.8%

LUV stock traded down $1.22 during mid-day trading on Thursday, hitting $31.12. 10,488,607 shares of the company were exchanged, compared to its average volume of 11,430,090. The business has a fifty day simple moving average of $32.98 and a 200-day simple moving average of $31.29. 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 12-month low of $23.82 and a 12-month high of $37.96. The firm has a market capitalization of $16.34 billion, a P/E ratio of 47.14, a PEG ratio of 0.85 and a beta of 1.19.

Southwest Airlines (NYSE:LUV - Get Free Report) last posted its quarterly earnings data on Wednesday, July 23rd. The airline reported $0.43 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 business had revenue of $7.24 billion during the quarter, compared to analysts' expectations of $7.30 billion. During the same period in the previous year, the business posted $0.58 EPS. The company's revenue for the quarter was down 2.1% compared to the same quarter last year. On average, equities research analysts predict that Southwest Airlines Co. will post 1.55 earnings per share for the current fiscal year.

Southwest Airlines announced that its board has authorized a share repurchase program on Wednesday, July 23rd that authorizes the company to buyback $2.00 billion in outstanding shares. This buyback authorization authorizes the airline to buy up to 9.4% of its shares through open market purchases. Shares buyback programs are typically an indication that the company's management 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. Investors of record on Wednesday, September 3rd will be paid a $0.18 dividend. The ex-dividend date is Wednesday, September 3rd. This represents a $0.72 dividend on an annualized basis and a yield of 2.3%. Southwest Airlines's payout ratio is currently 109.09%.

Insider Buying and Selling

In other news, Director Sarah Feinberg purchased 1,500 shares of the firm's stock in a transaction that occurred on Tuesday, August 5th. The stock was bought at an average price 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 of the company's stock, valued at $427,012.29. The trade was a 11.78% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, Director Gregg A. Saretsky purchased 3,345 shares of the firm's stock in a transaction that occurred on Wednesday, August 6th. The stock was purchased at an average price 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 $710,029.32. The trade was 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 insiders.

Wall Street Analysts Forecast Growth

A number of equities research analysts have recently commented on the stock. Deutsche Bank Aktiengesellschaft upgraded shares of Southwest Airlines from a "hold" rating to a "buy" rating and set a $40.00 target price for the company in a research report on Thursday, May 29th. Susquehanna increased their target price on shares of Southwest Airlines from $25.00 to $30.00 and gave the company a "neutral" rating in a research report on Tuesday, August 5th. Hsbc Global Res upgraded shares of Southwest Airlines to a "moderate sell" rating in a research report on Thursday, July 24th. Wall Street Zen cut shares of Southwest Airlines from a "hold" rating to a "sell" rating in a research report on Saturday, July 26th. Finally, Barclays increased their target price on shares of 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 research analysts have rated the stock with a Buy rating, nine have given a Hold rating and six have given a Sell rating to the company's stock. According to data from MarketBeat, the stock has a consensus rating of "Reduce" and a consensus target price 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.